In our newest booklet, Mercer Capital provides a framework of business valuation. Valuation is both an art and a science requiring technical knowledge and experience, informed judgment, and a clear understanding of the context in which an opinion of value will be applied. Whether for marital dissolution, shareholder dispute, estate planning, or transaction advisory, the valuation of a privately held business or business interest demands careful consideration of purpose, standard of value, premise of value, and facts and circumstances unique to the engagement and other factors.
Business Valuation 101 is designed to provide business owners and family law attorneys with a foundational understanding of key valuation concepts, definitions, and methodologies. It explores the framework that guides valuation analyses, the information typically required, and the approaches and methods used to determine value.
Additionally, this guide highlights special considerations that arise in divorce-related valuations, such as distinctions between personal and enterprise goodwill, active and passive appreciation, and the relevance and applicability of discounts for lack of marketability and control.
As the title implies, this is meant to be an overview and guide to assist non-valuation industry professionals in understanding a complex process. There are many detailed publications, and this piece is not meant to replace those. Our professionals can refer you more resources shall you prefer more in-depth publications.
