3.21: “Price” as used in valuators’ reports
CBVs make a clear distinction between “price” and “fair market value.” Fair market value is a notional term that is... View Article
Read ArticleCategories for 3. Common Terminology used in Business Valuators’ reports
3.22: Pro forma cashflow statements
A major principle in developing a fair market value conclusion is that valuation is forward looking. This is somewhat intuitive... View Article
Read Article3.23: Professional judgment and contrasting conclusions provided by multiple CBVs
It is well recognized that valuation conclusions on the same business can vary. Having separate valuations on the same business... View Article
Read Article3.24: Redundant assets
Some terminology used in business valuators’ reports is less easily understood than others. Redundancy sometimes implies no value. This is... View Article
Read Article3.25: “Special purchasers”
Fair market value, by definition, is a notional concept. It assumes, among other factors, that the business is exposed to... View Article
Read Article3.26: Sustaining capital expenditures
In developing a pro forma cashflow statement, a CBV will usually include a cash outflow line for “sustaining capex.” Sustaining... View Article
Read Article3.27: Synergies
In business combinations, it frequently happens that the acquirer can find “synergies” between its business and the “acquiree” (the target... View Article
Read Article3.28: Tangible asset backing
“Tangible asset backing” is a term found in valuators’ reports that refers specifically, and only, to the net tangible assets... View Article
Read Article3.29: Tax shields
“Tax shield” can refer to any factor within a company that helps to lessen the impact of normal taxes. The... View Article
Read Article3.30: Working capital
Working capital is distinguished from other forms of capital primarily because working capital is short term. In most cases it... View Article
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