Business Valuation

What Is a Business Valuation?

A business valuation is the independent and unbiased process of determining a supportable opinion of the value of a business, business ownership interest, security, or intangible asset as of a specified date. It is different than a real estate appraisal which assigns a value to land and buildings.

When determining the value of a cash-flowing business for the purposes of establishing a likely selling price, the business broker will often recommend a Broker Opinion of Value (BOV). These are relatively inexpensive and highly accurate predictors of what the selling price will be and it helps to set expectations and strategy. If the business owner also owns their real estate, a separate real estate appraisal will be needed.

When a Broker Opinion of Value (BOV) is not the right tool, we will often involve our team of professional business appraisers at Murphy Valuation Services:

More complicated/technical valuations

Some more complicated or technical valuations are performed by Murphy Valuation Services.  They are qualified, professional appraisers experienced in all aspects of business valuation and business transfers. Our valuations are performed in compliance with the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation (USPAP) as well as the Business Appraisal Standards of the Institute of Business Appraisers. Compliance with industry standards ensures that proven peer-reviewed valuation methods are used to develop defendable opinions of value. Through participation in teleconferences and annual valuation conferences, Murphy appraisers stay abreast of developing valuation issues and related court cases.

Why Perform a Company Valuation?

Sooner or later every business owner needs a reliable company valuation for one or more of a variety of reasons:

  • Business Sale
  • Financing or refinancing
  • Shareholder Agreement
  • Shareholder Disputes
  • Divorce
  • ESOPs
  • Estate Planning
  • Insurance Claims
  • Gift Taxes
  • Litigation
  • Mergers
  • Partnership Buyout
  • “C” Corp. to “S” Corp. conversion
  • Allocation of Purchase Price