Day 3 – Valuation Methods: An Attorney’s Guide To Understanding Business Valuation
In this episode of the Forensic Perspectives podcast, host Mark S. Gottlieb gives a detailed look at three general business valuation methods and how they’re used.
Episode Highlights:
Mark gives a general overview of 3 evaluation methods. (0:20)
When is the asset approach normally utilized? (0:35)
Mark mentions a key component you must remember when dealing with a market approach. (1:05)
What is the most common approach used in business evaluation? (1:40)
Which factors should you pay close attention to when using a market approach? (1:55)
Key Quotes:
“The asset approach is defined as a difference between the normalized assets less than normal normalized liabilities. The asset approach is commonly use for real estate or holding companies.” – Mark Gottlieb
“Even though you find similar industry participants, you still have to look to see if the financial attributes of the subject company have some symmetry with those companies that are bought and sold, that are in your database of the transactions you’re examining.” – Mark Gottlieb
“When we look at the income approach, there are certain things that we have to pay close attention to. The normalized income stream, the expected growth, the risk, industry wide factors, and company specific factors.” – Mark Gottlieb
