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Business Valuation For Dummies

Lisa Holton, Jim Bates

ISBN: 978-0-470-34401-9 September 2015 364 Pages


Business Valuation For Dummies is filled with expert guidance that business owners, managers at all levels, investors, and students can use when determining the value of a business. It contains a solid framework for valuation, including advice on analyzing historical performance, evaluating assets and income value, understanding a company's financial statements, estimating the cost of capital, business valuation models, and how to apply those models to different types of businesses.

Introduction 1

Part I: What Business Valuation Means 7

Chapter 1: The Value of Understanding Business Valuation 9

Chapter 2: What Triggers a Business Valuation? 19

Chapter 3: Understanding the Tangibles and Intangibles of Business Valuation 35

Chapter 4: Approaches and Methods — Basic Theories of the Valuation Process 45

Chapter 5: The Challenge of Valuation in a Knowledge Economy 61

Part II: Getting Familiar with Valuation Tools, Principles, and Resources 73

Chapter 6: Getting Familiar with a Typical Valuation Report 75

Chapter 7: Meeting the Supporting Players in the Valuation Process 87

Chapter 8: Understanding Financial Statements 111

Chapter 9: Using Rule-of-Thumb Valuations for Mom-and-Pop Businesses 131

Part III: If You're Selling a Business . . . 153

Chapter 10: Making Sure You're Ready to Sell 155

Chapter 11: Deciding What to Do about the Family Company 167

Chapter 12: Due Diligence on the Sell Side 181

Chapter 13: Case Study: Valuation on the Sell Side 189

Part IV: If You're Buying a Business . . . 203

Chapter 14: How Do You Know Whether You're Ready to Buy? 205

Chapter 15: Moving from Valuation to Negotiation 215

Chapter 16: Due Diligence on the Buy Side 225

Chapter 17: Forensic Accounting and the Due Diligence Process 239

Chapter 18: Case Study: Valuation on the Buy Side 251

Part V: Don't Try This at Home! Turning Things Over to the Valuation Experts 261

Chapter 19: Divorce 263

Chapter 20: Estate Planning and Gifting 275

Chapter 21: Attracting Outside Investors to Your Startup 287

Part VI: The Part of Tens 297

Chapter 22: Ten Reasons to Consider a Prenup 299

Chapter 23: Ten Questions to Answer Before Considering a Partnership Agreement 307

Chapter 24: Ten Things to Consider Before Transforming Your Company Into an ESOP 313

Glossary 319

Index 327