Value Consulting

Understand the value of your business.

Have you ever wondered what your company was worth? There are many reasons why you might need to know. These could include planning for the internal sale of your company, evaluating an offer to purchase your company, gifting shares to your children, or taking the first steps to transition to an ESOP, to name a few. In some situations, an informal “range of value” or calculation of value  will be sufficient to determine your company’s value. Others will require a full-blown valuation report.

At JAK, we can help you understand the value of your business. Although we don’t prepare valuation reports, as these would interfere with our attest independence, our team of valuation experts, which including a certified valuation analyst (CVA), can support you with the following value consulting services:

• Rule-of-thumb or range-of-value calculations
• Calculation engagements
• Floor value calculations
• Formula-based calculations for buy/sell agreements
• Valuation report review

We also provide these related services:

• Transaction tax and structure consulting
• After-tax cash flow analysis (for buyer)
• Feasibility of cash flow for transaction terms

Planning to purchase a company?

If you’re planning to buy or merge with another company, you likely received a valuation report as part of your evaluation of the transaction. A valuation report is typically long (approximately 100 pages!) and difficult to understand. Your JAK valuation consultant can guide you through the report and highlight critical need-to-know details. We can also offer feedback on the report, so you can feel confident in your decision.

Could you benefit from a rule-of-thumb or calculation engagement?

Owners who need only a ballpark value of their company often consider a rule-of-thumb, or range-of-value, engagement. This involves applying high-level industry multiples to your historical information to arrive at a range of values for your company.

A calculation engagement goes deeper than rule of thumb and results in a more customized value for your company. Although it relies on valuation concepts, a calculation is not as in depth as a valuation. It typically includes an analysis of your company’s historical income stream and projections, judgement-based adjustments, and the application of a customized capialization rate to your income stream. Your valuation consultant will provide you with a formal report that includes a specific value. These can, in certain situations, provide you with enough analysis of your company’s value to move ahead with a sale or acquisition.

Planning your estate, or your exit?

Knowing the value of your business is vital to estate planning and succession planning. It’s also helpful for determining how much life insurance to purchase for cross-purchase agreements. For these situations, you don’t need necessarily need a valuation report. A rule-of-thumb engagement or calculation engagement may  provide you with the information you need—at a much lower cost.

Let us support you.

If you’re in a situation where you need to know the value of your business, it can be hard to know where to start. JAK can help. Our valuation experts will guide you through the process and make sure you’re getting the right value engagement for your needs. Whether you need to decipher a valuation report or determine a rough value of your company, we’re here for you. Contact us today.