Frequently Asked Questions

Can't find the answer you are looking for? Email your questions to connect@aspenval.com and

we will get back to you shortly.

Frequently asked questions

General questions on business valuations

How does Aspen Valuations determine my business value?

The fair market value of your business can be determined by our accredited business valuations experts using one or more of the following approaches to value:

• The Asset Approach—typically provides a “floor value” for the business appraisal as it presumes that a prudent investor would pay no more/less for a business than its adjusted book value. This approach does not typically recognize or consider the future earning power of the business or goodwill.

 The Income Approach—values the business based on the future economic benefit of the business attributable to a new buyer. It considers both the return on investment to the buyer as well as the inherent risk associated with that return.

 The Market Approach—values the business based on the comparison of the subject company to its peer group. This approach is based on the principle of substitution, assuming that a prudent investor would gravitate to the investment of lowest price if all other metrics and risk factors were the same.

I am selling my business and have already reached an agreed upon price with the buyer. Is there any reason to have a business valuation completed?

You have one opportunity to sell your business. Confirming that you are receiving an equitable price for the business can provide assurance and peace of mind. Also, if the buyer is looking for bank financing, most major banks require a valuation report prepared by a chartered valuator. Our valuation reports meet the standards banks require.

Should I have a valuation done even if I don'y plan on selling my business right now?

You may need a business valuation for a number of reasons: management planning, financing, divorce, estate planning, succession planning, buy/sell agreement, employee incentives, litigation, or other reasons. A valuation often helps in the management planning process as business owners learn what drives value and ways to increase value.

 

Many of Aspen’s clients are recurring, meaning they require an updated valuation every one or two years. Business value is determined at a point-in-time. It should be updated as the business’s situation changes and market condition evolves. Contact Us to have your valuation updated at a discount fee.

What are the steps taken during a typical business valuation?

The steps taken by Aspen to prepare a valuation generally are as follows:

  • Establish the purpose and parameters of the valuation

  • Request documents and pertinent information about the image

  • Review information received and analyze historical financial information

  • Meet with owners/management to discuss historical trends and necessary normalizations for non-recurring or discretionary items, the future business plan and outlook, key risks and opportunities

  • Research the current economic and industry trends

  • Research out internal, as well as external, databases for mergers and acquisitions data and/or guideline public companies

  • Develop valuation model

  • Determine the cost of equity and weighted average cost of capital to determine the present value of future economic benefits

  • Develop public company market analysis and comparable company transaction analysis as appropriate

  • If applicable, analyze the shares being valued for such factors as voting rights, preferential rights, transfer rights or restrictions

  • If applicable, determine and apply appropriate premiums and/or discounts for control and marketability

  • Sent client our draft valuation report for review and comments. Review valuation methodologies and conclusions with client

  • Address any comments and questions that the client have regarding our draft valuations report

  • Finalize the issue the final valuation report

  • For litigation matters, provide expert testimony at meditation/arbitration or trial

Why Aspen Valuations is a Good Fit to Value Your Business

When do I need business valuations?

  • Sale, merger and acquisition of the business. Negotiating a merger, acquisition, or business sale often involved differences in opinion of value. An experienced valuation professional can assist you in explaining the valuation process and how it should be applied.

  • Tax. You need to determine the value of your business for tax-based transactions such as rollover of shares, gift of shares and reorganization of the company’s ownership structure.

  • Litigation purposes such as marital breakdowns or shareholder disputes.

  • Planning such as succession planning or planning for retirement.

  • Strategic opportunities. Knowing an accurate value of the business allows you to take advantage of opportunities such as adding business partners, financing for expansion, allowing key employees to buy company’s shares

How much does it cost to have my business valued?

The cost depends on a number of factors specific to the business. Some of these include:

  • The size of the business (i.e. annual sales)

  • The purpose of the valuation and types of valuation reports required

  • The quality of financial and other information

  • The complexity and dispersion of ownership and equity rights

If you are interested, we can provide you with a fee quote within 24 hours by completing this Request A Quote form.

What information do I need to provide to Aspen Valuations?

Once you’ve agreed to engage Aspen, we send you a list of the information we require to value your business. The following are the typically required for most valuations:

  • Financial statements of the business for the last five years (or three)

  • Corporate income tax return for the last year (or a recent year)

  • Business forecasts or projections, if prepared

  • Access to key management or owner to discuss the operations, financial results and other relevant factors such as competition, suppliers, customers, risks and opportunities of the business

Why should I trust Aspen Valuations?

You can put your trust in us for several reasons. Aspen professionals collectively bring more than two decades of business valuation and financial advisory experience to service our clients. Our team members hold several designations in business valuation and financial advisory follow the gold standards prescribed by these professional regulatory bodies. We are accredited by the following organizations:

  • Chartered Business Valuators Institute, Canada’s only professional body that regulates the business valuator profession.

  • American Institute of Certified Public Accountants (Business Valuation Accreditation discipline), one of the three major professional bodies that regulate the business valuation profession in the U.S

  • Chartered Professional Accountants (Canada).

  • Exit Planning Institute (International).

Will my information be kept confidential?

We understand the sensitive nature of a company’s internal information and treat the information with the utmost confidentiality and care. Information related to our clients is never discussed or released to outside parties without prior authorization. Our internal infrastructure induced high-standard firewall, virus scans and strict employee policies on handling client data

istockphoto-1023551936-170667a.jpg