24 Jul Valuation Articles from BVWire
BVWire’s recent newsletter includes a number of articles that are quite interesting, especially the first one. What they all tell us is that business valuation is not a science, nor does it provide “absolutes”. It seems that more and more courts (judges) are using a sale price, or what the market is telling them, as opposed to all of the fancy language many business appraisers use. We have even heard that a judge or two has accepted a pricing rule of thumb as the correct value for a business.
There are so many different methods to arrive at a value. (Note that I did not say price; that always seems to be different than a value.) It really does seem to me that a business is really worth what it will or has sold for. In fairness, however, the price can be based on whether the seller will finance, what the future holds for that business, etc.
A fast food place (now called a quick-serve or fast-serve restaurant) can sell for X. But then a short time later a better fast food place opens up a block down the street. A value and a selling price can change in an instant.
That said, all of the articles from this recent newsletter put out by BVR are well worth reading.
