Business-Valuation-Methods教程.pdf

BUSINESS VALUATION METHODS (All Valuations MUST BE based on Historical Data) I. Adjusted Book Value Take the Book Value of net worth -assets not acquired +liabilities not assumed +fair market value of assets acquired +any net worth adjustments =Adjusted Book Value ____________________________________________________________ II. Capitalized Adjusted Earnings First Step: Adjust Historical Earnings Seller’s Discretionary Last Cash Flow Year Net Profit 50.0 +Officer’s salary +70.0 +Discretionary expenses +30.0 -New Owner salary -60.0 Adjusted Profit 90.0 Second Step: Get the adjusted profits for 5 years then do a Weighted Average of the Adjusting Earnings Year Earnings Weight Adjusted 95 $ 50 1 $ 50 96 $ 30 2 $ 60 97 $ 70 3 $ 210 98 $ 60 4 $ 240 99 $ 90 5 $ 450 Totals 15 $1,010 /15 Average $ 67 (rounded) Third Step: Calculate a Discount Rate Determine T-Bill Rate 5.0%