Is growth all it's cracked up to be?
Nearly all business owners are motivated by the desire to “grow their business,” and there are obvious reasons why the alternative is not acceptable. But, growth for any reason, without an eye toward the bottom line, can retard value. Take a look at the table below from transactions from Pratt’s Stats, the leading database of [...]
Equity risk premium is now below 5%, says Damodaran
“It has been an interesting year, watching the market recover from the current crisis—a little too fast for my taste,” writes Professor Aswath Damodaran in his latest e-alert, Damodaran Online. “The equity risk premium in the S&P 500, which was 6.43% at the start of the year, is now back down below 5%,” he says. [...]
Economic Outlook Update releases latest quarterly analysis of business spending
The lastest data from Business Valuation Resources (www.bvresources.com) was released this week, and it shows growth in most categories of business investment. According to Economic Outlook Update, business spending, also known as nonresidential fixed investment, continued to drop during the third quarter of 2009, decreasing at a rate of 2.5%. The third quarter’s decline is [...]
BizMiner offers cash flow statements as part of their industry financial products
A 15-line cash flow analysis as a regular feature of every transaction has been added to the BizMiner database. This major enhancement is available as a free addition for single and subscription users. Contact dougt@bvresources.com for information about this new feature.
Taxpayer Win: Court Accepts 47.5% discount for formed, but not funded, FLP
Keller v. United States, 2009 WL 2601611 (S.D.Tex.) With the aid of longtime financial and legal advisors, a wealthy Texas widow established a family limited partnership (FLP), to be funded with $250 million in corporate investment bonds. She wanted to protect the family’s wealth, so she set up a limited liability company as the [...]
Can your business broker represent you in divorce court? It's probably a bad idea.
Haynes v. Haynes, 2009 WL 3219301 (Ohio App. 8 Dist.)(Oct. 8, 2009) During the 16 years of marriage, the wife operated a license bureau as a deputy registrar for the state of Ohio. After filing for divorce she retained a business broker to appraise the business; he had evaluated 20 different businesses—though none involved [...]
New valuation practice leader for Trenwith's east coast offices
John Kwon has joined Trenwith Valuation as Managing Director, and valuation practice leader for its east coast offices. John will be based in the firm’s New York office, and will focus particularly on the technology, telecommunications, media, industrial products, consumer products, and life sciences industries. Anthony Alfonso, President of Trenwith Valuation, made the announcement.
Kwon [...]
Are your forecasts too optimistic? Or too pessimistic? Both will hurt you during the recovery
"You really have to be attentive to forecasts, and less on history, as we go forward," says Jim Alerding, discussing distressed or impaired companies on today’s BVR teleconference. He suggests that business owners be very aware of failing products, customer concentrations that may diminish, and other indicators that suggest that a smaller version of the [...]
Capturing the liquidity premium–as an investor and as a business owner
Some of the top investment and wealth managers in North America joined together today for a session on asset allocation strategies for the future, sponsored by Wayne Cooper’s Wealth Management Exchange. Lowell Yura, a senior asset allocation strategist at UBS Global Asset Management, told the crowd the blunt truth that “lower expectations for future returns” [...]
Rise in distressed company valuation…and litigation
As the American Home Mortgage case shows, an unprecedented wave of impaired and distressed business valuations is about to flood the legal and economic landscape. Says Jim Alerding, “I’ve been in this business since 1980 and we’ve never really had a situation where there are so many businesses that are distressed or impaired at a [...]
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