A business valuation is the independent and unbiased process of determining a supportable opinion of the value of a business including tangible and intangible assets. California Business Ventures offers a confidential MPSP (Most Probable Selling Price) valuation.
The sole purpose of the MPSP analysis is to determine in the Broker’s Opinion, the likely and most reasonable asking price in the potential sale of a business enterprise and, or its assets.
Because privately owned companies tend to keep reported profits and thus taxes as low as possible, financial recasting is an important element to understanding the earning capacity of a business. Recasting allows meaningful comparisons with other business opportunities. A thorough review eliminates such items as excessive and discretionary expenses and nonrecurring revenues and expenses from the historical financial presentation (Non-Operational). Also, debt and interest expense are eliminated since they reflect the financing decisions of the current owner and may not represent financing preferences of a new owner. Similarly, depreciation and amortization are non-cash expenses and therefore recast.
Valuation is the number one question of all sellers when contemplating a sale, and of course, the concern of most buyers when purchasing a company. Unfortunately, there are probably several answers.