Services / Business valuation
Formal valuation reports prepared under recognized professional standards, and shorter calculation reports where a full report is more than the situation requires.
Business valuation
Valuation is the discipline underneath everything else we do, and the starting point of every sale, acquisition and succession plan we advise on.
Our reports are prepared by a designated valuator holding the ABV and ASA credentials, under the AICPA Statement on Standards for Valuation Services and the ASA Business Valuation Standards. They state the standard of value, the premise, the valuation date, the approaches used and the reasons the conclusion sits where it does.
A shareholder buyout, a Canada Revenue Agency filing or a litigation matter needs a full report with the analysis set out in a form that will hold up to scrutiny. An owner who wants to understand what a buyer would likely pay before deciding whether to sell usually needs a calculation report, delivered faster and at a lower cost, with the same underlying rigour.
We also prepare valuations for buyers assessing a target, and for lenders and their borrowers where a transaction is being financed.
For most private companies the conclusion rests on normalized earnings and the multiple or rate of return a buyer would apply to them. Normalization removes owner compensation above or below market, one time items and personal expenses run through the company. The multiple reflects risk: customer concentration, dependence on the owner, the quality of the financial records and how predictable the earnings are.
A valuation that explains those drivers is also a plan. It shows which changes would move the value and by how much.
The value of a company and what the owner takes home after a sale are different figures. Deal structure, working capital, debt and tax all sit between them. Where a sale is the purpose, we set out both.
Common questions
A calculation report applies agreed procedures and gives a conclusion with limited review, suited to planning and internal decisions. An estimate report involves a fuller review and analysis and suits most shareholder, tax and financing purposes. The purpose of the valuation decides which is appropriate.
A calculation report is usually delivered in two to four weeks from receipt of the financial information. Fuller reports take longer, depending on scope.
Typically three to five years of financial statements, recent interim results, tax returns, and a conversation with the owner about customers, staff and the outlook. We send a specific request list at the start.
Not always. A valuation states value under a defined standard. What a particular buyer pays also depends on synergies, competition between buyers and the deal structure.
Related services:
A partner will respond within one business day. Nothing you share is disclosed to anyone.
BuySell Consortium, 18 King St. E, Suite 1400, Toronto, ON M5C 1C4. Your details are used only to respond to this request.
