Determining the Value of a Business

There are many reasons why you might want to know the accurate value of your business. Perhaps another party has offered to purchase the business, or you are considering a merger. Maybe you decide it’s time to put the business up for sale to start a new venture, or one owner is leaving, and the company needs to purchase their interests. Whatever the situation might be, seek assistance from an Alpharetta business transactions attorney who can help you determine your company’s value.

Valuation Methods

There are different ways to appraise a business, and the method you use should depend on your circumstances. You might have a contract, such as a buy-sell agreement, that sets out the method you must use, or the choice might be yours.

Asset-based approach – This determines the value of all the company’s assets and investments, either based on liquidation value or total assets minus liabilities.

Earning value approach – This method bases value on the ability of the business to bring in earnings, whether it is capitalizing past earnings or discounted future earnings.

Market value approach – This approach compares your business to other similar companies in the market that recently sold or merged. This does not work if your business is highly unique or there aren’t a lot of similar companies in the market to compare

The most important thing about business valuation is not the method you choose, but making sure that you get an accurate result, so you understand the full value for your company.

Speak with an Alpharetta Business Transactions Lawyer

When businesses in the area need an Alpharetta business transactions attorney, they want Battleson Law, LLC, on their side. Contact us online or call 470.398.1175 to set up an appointment to discuss any legal needs of your business and how our legal team can help.

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