Gift, Estate, & Income Tax Compliance
2018 01 Value Matters

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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Mercer Capital to Sponsor TexasBarCLE’s 50th Annual Advanced Estate Planning & Probate Course
Mercer Capital to Sponsor TexasBarCLE’s 50th Annual Advanced Estate Planning & Probate Course
Mercer Capital is pleased to sponsor TexasBarCLE’s 50th Annual Advanced Estate Planning & Probate course, taking place June 3 -5, 2026, at the Hyatt Regency Frisco-Dallas. J. David Smith, CFA, ASA, and Andrew B. Frew, ASA, ABV, will attend on behalf of the firm.Hosted by TexasBarCLE and cosponsored by the Real Estate, Probate & Trust Law Section of the State Bar of Texas, the annual course brings together estate planning and probate professionals for three days of focused education and discussion. This year’s agenda includes sessions on case law updates, fiduciary issues, grantor trusts, retirement benefits, will contests, and current developments in estate planning tax law.David Smith is a Senior Vice President at Mercer Capital and a senior member of the firm’s tax practice. He provides valuation services for tax planning, transactional purposes, and financial reporting, with particular experience in industries including financial services, oil and gas, and biotechnology. David is also a regular contributor to Mercer Capital’s Value Matters Newsletter.Andrew Frew is a Vice President at Mercer Capital and has nearly 25 years of business valuation experience. He has been involved with hundreds of valuation and related engagements across numerous industries and values businesses and business interests for gift and estate tax, charitable giving, buy-sell agreements, mergers and acquisitions, business succession and exit planning, and litigation support purposes.Mercer Capital regularly assists attorneys, fiduciaries, and advisors with valuation matters that arise in estate planning, probate, tax planning, and related disputes. The firm is pleased to support programs that help professionals address the financial issues that often accompany trusts, estates, and closely held business interests.Mercer Capital looks forward to connecting with attendees in Frisco. Additional information about the course is available through TexasBarCLE: https://www.texasbarcle.com/.
Mercer Capital to Attend and Speak at the 38th Annual ABA RPTE National CLE Conference
Mercer Capital to Attend and Speak at the 38th Annual ABA RPTE National CLE Conference
Mercer Capital will attend and participate in the 38th Annual American Bar Association Real Property, Trust and Estate (RPTE) National CLE Conference, held April 29–May 1, 2026, in Chicago, IL, at the Loews Hotel. Travis Harms and Tim Bronza will represent the firm, with Harms also participating as a speaker.The RPTE National CLE Conference is one of the ABA’s flagship gatherings for real property and estate planning professionals, bringing together attorneys and advisors for several days of in-person education and discussion. Topics this year range from estate and gift tax planning and charitable strategies involving closely held businesses to real estate transactions and fiduciary considerations, with an emphasis on practical takeaways for day-to-day practice.Harms will serve as a panelist on the session “Fair (Market) Warning: This is Not a Final Determination – Practical Advice from Tax Litigators."Travis Harms is President of Mercer Capital and leads the firm’s Family Business Advisory Services Group. He works with multi-generation family businesses on valuation, financial education, and strategic planning, helping families align ownership structures and long-term objectives.Tim Bronza is Managing Director of Mercer Capital’s Florida office. He has extensive experience valuing business interests for federal gift, estate, and income tax purposes and works with clients and their advisors on complex valuation matters across a range of contexts.Mercer Capital regularly supports attorneys and fiduciaries in these areas through independent valuation and financial advisory services. The firm’s work includes analyses prepared for gift and estate tax planning, succession planning, and dispute resolution, with an emphasis on producing clear, well-supported conclusions that can be used in both planning and adversarial settings.Mercer Capital looks forward to participating in this year’s conference. To learn more about the RPTE conference, visit the event’s website: https://rptecleconference.com/.
April 2026 | Valuation Date Discipline
Value Matters® April 2026

Valuation Date Discipline

In estate and gift tax related business valuation, few inputs are as consequential, and as frequently underestimated, as the valuation date. While the concept appears straightforward, the practical implications are anything but. The valuation date determines the universe of information available to the appraiser, frames the applicable standard of value, and anchors the conclusion in a specific economic, industry, and subject company context.

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