Standards of Value: Fair Market Value vs. Fair Value vs. Investment Value
Why the same business can have different values: fair market value, fair value (legal and accounting), investment value and intrinsic value, and which standard applies when.
Discounts for Lack of Control and Marketability (DLOC and DLOM) Explained
How discounts for lack of control (DLOC) and lack of marketability (DLOM) are measured and applied, typical evidence, IRS scrutiny, and when discounts don't apply.
Normalization Adjustments and Add-Backs: How Reported Profit Becomes Value
How normalization adjustments and owner add-backs turn reported profit into adjusted EBITDA and SDE, with a worked example, red flags buyers reject and documentation tips.
Quality of Earnings vs. Business Valuation: What Buyers, Sellers and Lenders Need to Know
A quality of earnings report tests whether EBITDA is real; a business valuation concludes what the company is worth. Learn when you need each, and how they work together.
Business Interruption Claims: Quantifying the Loss
A fire, a flood, a burst sprinkler main, a supplier’s plant going down, or an equipment failure stops the business. Property insurance pays to rebuild the building and replace the machine. Business interruption coverage is supposed to pay for the...
Succession Planning for Family Businesses: Why Valuation Comes First
Family business succession fails for predictable reasons, and most of them trace back to a number nobody established early enough. The son who ran the company for fifteen years believes the business grew because of him. His sisters, who have...
Cost of Capital for Private Companies: Building a Defensible Discount Rate
In an income approach valuation, two numbers determine the answer: the expected benefit stream and the rate used to convert it into present value. Owners and attorneys spend most of their attention on the first. Experienced reviewers spend most of...
Valuing a Professional Practice: Medical, Dental, Veterinary, Legal, and Accounting
Professional practices are valued more often than almost any other category of closely held business, because their ownership turns over predictably. Partners retire, associates buy in, practices merge, consolidators acquire, and marriages end. Each event needs a number. They are...
Calculating Economic Damages and Lost Profits
When a contract is breached, a trade secret is taken, a distributor is terminated improperly, or a business is disrupted by someone else’s conduct, the injured party has to prove not just that harm occurred but how much. Courts require...
Fairness Opinions and Solvency Opinions: Protecting Boards and Transactions
Two specialized opinions appear repeatedly in transactions that involve conflicts, leverage, or fiduciary exposure. They are frequently confused, they answer entirely different questions, and both exist primarily to protect decision-makers who will later be asked to justify what they approved....
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