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Top 5 Purposes  for Business Valuation

                                              Top 5 Purposes  for Business Valuation

Business valuation is done for many reasons, understanding the position of their share in the market, how they fare in the top slots in any business forums, mergers, acquisitions, etc., the reasons could be many. Business owners, investors, shareholders regulatory authorities and others could need the valuation of how the business is running to understand how they are on par with other similar companies in the same or other sectors.

Purposes of valuation of the business

  • to allocate a purchase price
  • in the process of liquidation of the company
  • reorganization of the company from its existing business to foray into some other products and services
  • going for an
  • initial public offer
  • contribution to charities
  • stock option Incentives
  • assessing insurance claims
  • In the broader perspective the assets, the market, and the earnings approach are more common in determining the fair price of the business, including the technology and software like Crypto CFD Trader. There is, however, different ways to value, depending upon nature, source and the purpose for which the valuation is done.

 

Top five purposes

  • the most common while a acquisition and merger is happening, the business valuation is undertaken as a first step, only if the results are favorable, then the next step to negotiate and go for acquiring an existing or new company or merge into an existing or new business is done for the pricing and other regulatory requirements
  • selling the business cannot be done without knowing the net worth of the business, and determining the fair market value is important before entering into any sale agreement, and knowing the most probable selling price is an advantage before entering into any negotiations
  • in partnership form of business it is common to value the business in an all buy-sell agreement between the partners, so in the case when the shareholders want to buy the business and there is an agreement to that effect to value the business by professionals who determine the fair market value
  • transferring a portion of the business to the employees involves the valuation of the business which is complex, however, ESOP is common, by giving employees a portion of the stock as benefits instead of cash incentives, is done with a help of professionals
  • Limited liability companies, the minority shareholders may request the valuation of the business to understand their share that can be gifted and retain the major portion for the estate.

 

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About The Blog Author

Teresa Duncan received a degree of Master of Science in Healthcare Management from Marymount University. With over 22 years of healthcare experience (15 in dental), she has unique insight into the world of dentistry. Her specialty is helping dentists and managers increase revenue. By focusing on accounts receivable and insurance management, she helps dentists increase the value of their practice. As a member of the Association of Certified Fraud Examiners, she has a special interest in helping dentists identify and safeguard against employee embezzlement.

Teresa is founder and president of Odyssey Management.

She is a Fellow and Educator for the ICOI’s Association of Dental Implant Auxiliaries. Look for more articles from her regarding practice management, dental implants and oral health care news. She was named 2010’s ADIA Educator of the Year.

Teresa is a member-at-large on the board of the Academy of Dental Management Consultants.

Teresa is a Trustee for the auxiliary education-focused DALE Foundation.

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