Jameson Van Houten of Stonegate Financial Group discusses three of the many ways to determine the value of a business.

1. Three Types of Business
Value Assessments
From Jameson Van Houten of Stonegate Financial
Group

2. Asset-Based Assessment
 Value of all tangible and intangible assets
 Usually used for bankrupt companies or those looking
to sell/liquidate
 Does not take future earnings potential into account in
the assessment

3. Market-Based Assesment
 Looks at others in the same industry that have recently
been sold.
 Takes these prices into account when valuing the
current business in question.

4. Earnings-Based Assessment
 Earnings have a multiple applied to them
 The multiple varies according to several factors
 Industry, outlook for the business in the future, etc.
 Normalized earnings adjusted for several things.
 Including owner’s compensation and related expenses

5. It’s not easy…
 Determining the value of a business is a complicated
process that takes many factors into account.
 There’s no one formula that applies across the board.
 Seek out the help of a professional like Jameson Van
Houten at http://stonegatefg.com