Business Valuation Methods: Income Approach and DCF Model – Company Valuation Expert in St. Louis, Chicago

Business Valuation Methods: Income Approach and DCF Model – Company Valuation Expert in St. Louis, Chicago

One of the approaches business valuation companies will consider when providing a valuation of a company is the Income approach.

The income approach considers historical income, future revenues of a company, the earning potential and also capital requirements, or how much will be needed to invest in the building and equipment to support future revenue growth.

There are a couple of ways to look at the potential income of a company. One business valuation method which falls under the Income approach is the discounted net cash flow or DCF method. This method involves projecting the revenues, cost of goods sold, operating expenses, depreciation, working capital and taxes for five to ten years into the future.

The next step is to discount this future revenue stream to the present, which most of you will recognize as a present value calculation. The discount rate is derived from several methods such as the build up model or CAPM for example. The business valuation expert will also have to take into consideration whether this is a control or minority interest and make an adjustment with a control premium or a discount for lack of control. These are business valuation terms…which we discuss in more detail in other videos.

There can also be situations where there are liquidity or marketability issues for stock in closely held businesses. There are discounts for lack of marketability to cover these issues.  As you can see there are many steps to consider when valuing a company from the income approach, but at least now you know enough to be dangerous.

If you would like more information on business valuations, methods to value a company or how to find reputable business valuation companies in Chicago, New York or St. Louis check out our website at http://www.ValuationStLouis.com or you can find additional videos on company valuation issues at http://www.YouTube.com/businessvaluationSTL

Alimony Guidelines and Spousal Support Calculators for Divorce Proceedings in Missouri

http://www.ValuationStLouis.com (314) 541-8163 Alimony Guidelines and Spousal Support Calculators for Divorce Proceedings in Missouri – Divorce valuation expert in St. Louis.

Many attorneys and business owners want to know about alimony guidelines or spousal support issues regarding a divorce in Missouri:

What happens after you file divorce papers? Is there a way to determine alimony with a spousal support calculator online?

Well — first off, most of us regular people use the term alimony to refer to the payment from one spouse to another after a divorce. Many family law attorneys use the word maintenance or spousal support when referring to alimony.

That being said — you can certainly use an online tool to calculate the alimony or maintenance amount, but you would just be guessing at the number. There are some software packages out there for $100-300, but then you need to know how to use the software and analyze the data.

Many attorneys will hire an expert to calculate the tax issues involved in paying maintenance and in some instances child support.

There are many factors involved in determining what amount of alimony will be paid. Some of the factors a judge will consider is the length of the marriage, how much each person worked over the marriage, what is the history of earnings for each person, what is the age, education and future earning potential of each parties, were there any children involved or future child care costs, are there significant assets which will provide cash flow to the parties…and so on.

Your lawyer will know if there are any spousal support guidelines — but usually this is based on the attorney’s experience in the family law courts.

One thing to keep in mind is that alimony is a tax deduction to the paying spouse and taxable income to the receiving spouse. So it is important to have someone who is knowledgeable about the tax ramifications of spousal support calculate the amount.

Alimony guidelines differ depending on all the variables for each divorce situation. Many times it will cost between $500 and 1500 for an expert to calculate various scenarios for the divorcing parties. This will give your lawyer plenty of information to negotiate on your behalf.

Alimony is usually just one part of the negotiation of a divorce or legal separation and it is best if the calculation is left to a professional rather than an online spousal support calculator.

If you would like to know more about how to find a Missouri divorce valuation expert, certified valuation analyst or forensic accountant, in St. Louis, Chicago or Kansas City check out our website at http://www,valuationstlouis.com or for more videos on how to value a company check out http://www.Youtube.com/businessvaluationstl

Business Valuation Methods: Asset or Cost Approach

One of the approaches business valuation companies will consider when providing a valuation of a company is the asset approach. The asset approach considers the assets and liabilities of a company, there is more focus on the balance sheet of the company.

This approach is typically used when valuing holding companies, companies with significant real estate holdings or possibly companies without much cash flow from operations.

The adjusted book value is one way to look at the balance sheet. Usually this approach involves restating some of the items to fair market value. This could include buildings and land, equipment or intercompany loans.

For buildings, there may be real estate appraisals performed to get to the fair market value.

There can also be situations where there are liquidity or marketability issues for stock in closely held businesses. There are discounts for lack of marketability to cover these issues.

As you can see there are many steps to consider when valuing a company from the asset approach, but at least now you know enough to be dangerous.

If you would like more information on business valuations, methods to value a company
or how to find reputable business valuation companies in Chicago, New York or St. Louis check out our website at http://www.ValuationStLouis.com Or you can find additional videos on company valuation issues at http://www.YouTube.com/businessvaluationSTL

Business Valuation: Methods the Experts Use to Value a Company

Clients always have questions about how to value a business, business valuations, methods of valuing a company and the process in general. There are a few different methods used by experts when completing a valuation of a company. Income Approach, Asset or Cost Approach and Market Approach.

There are guidelines for each method and comprehensive business valuation analysis which is done for each particular approach. In general, a professional valuation expert has to consider these three approaches. And by professional, I mean an expert with credentials or certifications who are members of organizations which have standards — and the professional has to comply with these standards.

Many times other finance and accounting professionals such as CPAs, business brokers or financial advisors may be able to give you an idea of the value of a company, but they are not necessarily obligated to use any specific business valuation methods.

Typically a company would need a formal valuation if there was some type of litigation involved or if the valuation is going to be attached to a tax return and submitted to the IRS. In these cases the valuation expert needs to understand and conform to the standards.

If you would like more information on business valuations, methods to value a company or how to find reputable business valuation companies in Chicago, New York or St. Louis check out our website at http://www.ValuationStLouis.com Or you can find additional videos on company valuation issues at http://www.YouTube.com/businessvaluationSTL