Anacapa Valuation’s 10-step business valuation process:
- Initial discussion with client, attorney, trustee, or accountant and consideration of engagement requirements and potential conflicts of interest.
- Define engagement (purpose of valuation, standard of value and date of valuation), prepare budget and proposal, and agree to the engagement terms.
- Gathering and analyzing of subject company’s data and site visit, if required.
- Economic and industry research about the subject company.
- Choose the best valuation approaches to use for the company.
- Asset Approach (Net Asset Value or Liquidation Value)
- Income Approach (Capitalization of Net Cash Flow or Discounted Future Cash Flow)
- Market Approach (Comparative Sales Transactions or Public Guideline Company Market Data).
- Excess Earnings, Rules of Thumb or Other Methods
- Calculate the indicated values of the enterprise as a whole.
- Develop and apply appropriate discounts or premiums to adjust the indicated enterprise values to match the character of the subject interest.
- Calculate the subject interest value and consider its reasonableness.
- Document the facts and the valuation approach in a business report.
- Present or defend the valuation.