Gift, Estate, & Income Tax Compliance

January 1, 2018

Mercer Capital’s Value Matters® 2018-01

Six Different Ways to Look at a Business

Along the road to building the value of a business it is necessary, and indeed, appropriate, to examine at the business in a variety of ways. Each provides unique perspective and insight into how a business owner is proceeding along the path to grow the value of the business and on if/when it may be ready to sell.  Most business owners realize the obvious events that may require a formal valuation:  potential sale/acquisition, shareholder dispute, death of a shareholder, gift/estate tax transfer of ownership, etc.  A formal business valuation can also be very useful to a business owner when examining internal operations.  

So, how does a business owner evaluate their business? And how can advisers or formal business valuations assist owners examining their businesses? There are at least six ways and they are important, regardless of the size of the business.  All six of these should be contemplated within a formal business valuation.  

  1. At a point in time. The balance sheet and the current period (month or quarter) provide one reference point. If that is the only reference point, however, one never has any real perspective on what is happening to the business.
  2. Relative to itself over time. Businesses exhibit trends in performance that can only be discerned and understood if examined over a period of time, often years.
  3. Relative to peer groups. Many industries have associations or consulting groups that publish industry statistics. These statistics provide a basis for comparing performance relative to companies like the subject company.
  4. Relative to budget or plan. Every company of any size should have a budget for the current year. The act of creating a budget forces management to make commitments about expected performance in light of a company’s position at the beginning of a year and its outlook in the context of its local economy, industry and/or the national economy. Setting a budget creates a commitment to achieve, which is critical to achievement. Most financial performance packages compare actual to budget for the current year.
  5. Relative to your unique potential. Every company has prospects for “potential performance” if things go right and if management performs. If a company has grown at 5% per year in sales and earnings for the last five years, that sounds good on its face. But what if the industry niche has been growing at 10% during that period?

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WEBINAR: Buy-Sell Agreements: Designing Valuation Processes
UPCOMING WEBINAR: Buy-Sell Agreements: Designing Valuation Processes
The program will examine the purpose of buy-sell agreements, key valuation provisions, formula-based and appraisal-based pricing methods, and alternative appraiser structures. It will also address practical considerations for implementing and updating the valuation process, including timing, costs, funding terms, and appraiser continuity.
Mercer Capital to Sponsor ACTEC Florida Fellows Meeting
Mercer Capital to Sponsor ACTEC Florida Fellows Meeting
Mercer Capital is pleased to sponsor ACTEC’s 2026 Florida Fellows Meeting, taking place Wednesday, August 19, 2026, at The Breakers in Palm Beach, Florida. Tim Bronza, CPA, ASA, and Sujan Rajbhandary, CPA, ABV, will represent the firm at the meeting.ACTEC, the American College of Trust and Estate Counsel, is an organization of trust and estate lawyers and law professors in the United States and around the world. Its Fellows are committed to maintaining excellence in the trust and estate legal field and improving the practice of trust and estate law.The 2026 Florida Fellows Meeting will feature an afternoon of educational programming, networking, and discussion during ACTEC’s return to The Breakers. This year’s program includes sessions on trust litigation, single-member LLC planning, and the legal, ethical, and practical challenges attorneys face when counseling clients on disinheritance.Tim Bronza serves as Managing Director of Mercer Capital’s Florida office. He has extensive experience valuing business interests for federal gift, estate, and income tax purposes and leads sophisticated valuation engagements across corporate and fiduciary contexts.Sujan Rajbhandary is a Senior Vice President with Mercer Capital and a member of the firm’s Gift, Estate & Income Tax Group. He has 20 years of experience advising closely held businesses, family-owned enterprises, and public companies on valuation and tax planning matters. He is a regular contributor to Mercer Capital’s Value Matters Newsletter.Mercer Capital regularly works with owners, fiduciaries, and professional advisors on valuation and advisory matters involving trusts, estates, tax planning, transactions, and disputes. The firm is pleased to support educational programs that help professionals navigate complex financial issues in estate and trust matters.Mercer Capital looks forward to connecting with attendees in Palm Beach. To learn more about this year’s conference, visit the Florida Fellows Meeting website: https://events.rdmobile.com/Events/Details/19947
July 2026 | Complex Governance Structures in Gift  and Estate Tax Valuation
Value Matters® July 2026

Complex Governance Structures in Gift and Estate Tax Valuation

In valuations for gift or estate tax reporting purposes, the subject of the appraisal is not simply a percentage ownership interest, but the specific ownership interest being transferred, together with the legal and economic rights attached to it.
Value Matters® Newsletter
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