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 and Attend the 13th Annual Florida Tax Institute
Mercer Capital to Sponsor and Attend the 13th Annual Florida Tax Institute
Mercer Capital is pleased to sponsor the 13th Annual Florida Tax Institute, which will be held April 8–10 at The Ritz-Carlton Orlando, Grande Lakes in Orlando, Florida. Tim Bronza, CPA, ASA; Tom Insalaco, CFA, ASA; and Barbara Price will attend on behalf of the firm.More than a conference, the Florida Tax Institute is widely recognized as a leading educational forum for attorneys, accountants, trust officers, estate planners, and financial advisors. This year’s program features nationally respected speakers addressing timely developments in federal and state taxation, estate and gift tax planning, business tax matters, and emerging regulatory considerations. Sessions are designed to offer practical insights that professionals can apply directly in their client work.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.Tom Insalaco is a Senior Vice President in Mercer Capital’s Florida office. Since 2008, Tom has performed valuation analyses across a broad range of industries, assisting attorneys, fiduciaries, and financial professionals with estate planning, exit planning, and transaction-related matters.Barbara Walters Price serves as Chief Marketing Officer of Mercer Capital and is also a member of the firm’s Board of Directors. She leads the firm’s marketing strategy and oversees corporate communications, business development, digital strategy, and thought leadership initiatives.Mercer Capital’s sponsorship reflects the firm’s ongoing commitment to supporting the tax and estate planning communities in Florida and beyond. Learn more about the event at https://www.floridataxinstitute.org/
March 2026 | Fixing Price or Fixing Risk?
Value Matters® March 2026

Fixing Price or Fixing Risk? | Sections 2031, 2703, Huffman, and the Case for Independent Valuation

Buy-sell agreements are foundational planning tools for closely held businesses. When thoughtfully structured, they provide continuity, liquidity, and governance stability. If not drafted carefully, they can undermine estate planning objectives and create significant transfer tax exposure. For advisors of closely held business owners, the recurring question is not whether to use a buy-sell agreement, but whether the pricing mechanism embedded in the agreement will be respected for estate and gift tax purposes.
WEBINAR: Buy-Sell Agreements: What Estate Planners Need To Know
UPCOMING WEBINAR | Buy-Sell Agreements: What Estate Planners Need To Know
This webinar provides advanced estate planning attorneys with a comprehensive examination of buy-sell agreements in closely held businesses, focusing on their structure, valuation, and tax implications.

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