Three Types of Business

Value AssessmentsFrom Jameson Van Houten of Stonegate Financial

Group

Asset-Based Assessment Value of all tangible and intangible assets

Usually used for bankrupt companies or those looking

to sell/liquidate

Does not take future earnings potential into account in

the assessment

Market-Based Assesment Looks at others in the same industry that have recently

been sold.

Takes these prices into account when valuing the

current business in question.

Earnings-Based Assessment Earnings have a multiple applied to them

The multiple varies according to several factors

Industry, outlook for the business in the future, etc.

Normalized earnings adjusted for several things.

Including owner’s compensation and related expenses

It’s not easy… Determining the value of a business is a complicated

process that takes many factors into account.

There’s no one formula that applies across the board.

Seek out the help of a professional like Jameson Van

Houten at http://stonegatefg.com