Chapter 6
Getting Familiar with a Typical Valuation Report
In This Chapter
Understanding the goal of the valuation
Uncovering the basic offerings of a valuation report
Deciphering what each part of the report means
We’ve said it before and we’ll say it again: Valuations aren’t driven by bricks and mortar sitting on a piece of land. They’re driven by the reason someone wants to acquire a business or get rid of one. An asset’s value is ultimately driven by the rationale for a transaction. And the goal of any valuation (regardless of the purpose) is to answer the question “What would happen in the market?”
In this chapter, we discuss the basic elements of a business valuation report, with the understanding that no two reports, like no two business valuations, should ever be the same. The best valuation reports tell a story about the history of a business, its pros and cons, and most importantly, its potential.
Understanding what a finished product should look like is always helpful before you start a process, so this chapter also lays out the general elements of any business valuation report that you’d pay for from a business valuation consultant or appraiser. Reports can vary in length and complexity based on the complexity of the job. Here, we give you a very basic starting point so you can see how reports present the essential information of valuation.
Note: This chapter, like most of the book, is focused on working with a valuation professional in determining what a business ...
