Business Valuation Fundamentals

1,033 views

Published on

A presentation made by Brent McDade at the 2011 Memphis Bar Association Bench Bar and Boardroom Conference.

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,033
On SlideShare
0
From Embeds
0
Number of Embeds
75
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Business Valuation Fundamentals

  1. 1. Business Valuation Fundamentals Memphis Bar Association Bench Bar and Boardroom Conference May 6, 2011
  2. 2. Dissolving, Divorcing, and Distributing
  3. 3. Who Is This Guy? • Brent McDade, ASA, CBA, BVAL • Former Memphian • Business appraiser since back when I was physically fit • All around nice guy
  4. 4. Single 4
  5. 5. Married
  6. 6. Decosimo Advisory Services• Business Valuation• Litigation Support• Transaction Advisory
  7. 7. Decosimo Corporate Finance• Broker Dealer• Member FINRA/SIPC• Formalization of investment banking services provided by Decosimo CPA firm for more than 35 years: involved in the mergers and acquisitions of five major league baseball teams, more than 100 Coca-Cola bottlers
  8. 8. What We’re Going to Cover• When and how do shareholders realize value?• How is this relevant to attorneys?
  9. 9. Why do people own businesses?
  10. 10. Why do people own businesses?• Very simply, to receive the benefits of business ownership• Financial benefits of business ownership come in two forms: – Interim cash flows, in the form of distributions to owners – Value at ultimate sale
  11. 11. Value a Function of Expected Future Cash Flows
  12. 12. Realizing Value
  13. 13. Transaction Types• Voluntary • Involuntary – Gifts – Death – Divorce – Divorce – Breakups – Breakups – Financial conditions – Financial conditions – Shareholder disputes – Shareholder disputes – Contractual – Contractual – Sales – Sales – Employee Incentives – QFDR
  14. 14. “The Value”• No such thing as “the value”• Companies change in value over time• Companies have a number of values that exist simultaneously• Need to define the correct value for the situation
  15. 15. Things that Influence Value Conclusions• Subject of the valuation• Standard of value• Premise of value• Level of value• Valuation date
  16. 16. Levels of Value
  17. 17. A New Kind of Value
  18. 18. Tennessee Valuation Cases• Blasingame v. American Materials – 1983 case that everyone quotes – Affirms use of Delaware Block Method – Questions the consideration of only one year of earnings in a capitalized earnings method
  19. 19. Divorce Valuation Cases• Wright v. Quillen• Harmon v. Harmon• Alsup v. Alsup• Bertuca v. Bertuca• Smith v. Smith• Hazard v. Hazard• Cunningham v. Cunningham• York v. York• Inzer v. Inzer
  20. 20. Questions?

×