Experience and the Test of Reason

The Tax Court opinion regarding the Estate of Thompson vs. the Internal Revenue Service (T.C. Memo 2004-174) is remarkable in that the full opinion is essentially a business valuation analysis.  The 54 page decision report includes approximately 18 pages of … Continued

Normalizing Adjustments to the Income Statement

Normalizing adjustments adjust the income statement of a private company to show the prospective purchaser the return from normal operations of the business and reveal a “public equivalent” income stream.

Valuing Phantom Stock

Phantom stock is sometimes more “phantom” than valuation and accounting professionals would like. Small business owners may make phantom stock agreements with key employees, but fail to mention these agreements to their financial advisors, particularly, but not exclusively, when the … Continued

Assessing the Quality of Earnings

A critical aspect of any valuation analysis is the appraiser’s ability to read, understand and interpret a Company’s financial statements – a skill vital to making an accurate assessment of the value of any company.

Valuation and Business Concentrations

Concentrations are a significant issue in valuing a business enterprise. The presence and magnitude (or absence) of business concentrations are major considerations in assessing a subject company’s risk profile and financial outlook.