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Valuating the venture
Valuating the venture
Valuating the venture
Valuating the venture
Valuating the venture
Valuating the venture
Valuating the venture
Valuating the venture
Valuating the venture
Valuating the venture
Valuating the venture
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Valuating the venture

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  • 1. VALUATING THE VENTURE<br />
  • 2. Importance‚Ķ<br />Buying or selling a business,divisionor major asset.<br />Establishinging an employee stock option plan or profit sharing of employees.<br />Raising growth capital through stock warrants or convertible loans.<br />
  • 3. Contd..<br />Determining inheritence tax liability(potential estate tax liability).<br />Giving a gift of stock to family members.<br />Structuring a buy/sell agreement with stockholders.<br />
  • 4. Evaluation Of Selected Business<br />The business environment.<br />Profit , sales and operating ratio.<br />The business assets.<br />
  • 5. Due Diligence<br />Why is business being sold?<br />What is the physical condition of the business?<br />How many key personnel wil remain?<br />
  • 6. Contd..<br />What is the degree of competition?<br />What are the conditions of the lease?<br />Any special licences required?<br />
  • 7. Contd..<br />What are the future trends of the business?<br />How much capital is needed to buy?<br />
  • 8. Underlying Issues<br />Goals of buyer and seller.<br />Emotional bias.<br />Reasons for the acquisition.<br />
  • 9. Analyzing The Business<br />Lack of management depth.<br />Undercapitalization<br />Insufficient controls<br />Divergent goals<br />
  • 10. Other Factors To Consider<br />Avoiding start-up costs.<br />Accuracy of projections<br />Control factor<br />
  • 11. Valuation Method<br />Adjusted tangible book value.<br />Price/earnings ratio method.<br />Discounted earnings method.<br />

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