(501)221-3343 info@millercopas.net

Business Valuation Service

What's Your Business Worth?
Find Out Today

Business Valuation Services

Calculation Engagement

This is a limited scope valuation service offered by Miller & Company in the event of valuing a trade or business to determine the feasibility for a buyer or seller a business in contemplation of deciding to purchase or sell a business. The calculation engagement occurs when the client and valuator agree to specific valuation approaches and methods, and the extent of selected procedures and results in a calculated value.  This approach will meet the criteria of development of the engagement and will include sufficient detailed information to support the Calculated Value As established by the  Professional Standards of the National Association of Certified Valuators and Analysts (NACVA).

The report will include:

Introduction:

Identification of subject valued
Purpose, use and users of valuation
Description of interest being valued
Ownership size, nature, restrictions and agreements
Calculation date
Report date
Scope of work
Calculation procedures
Hypothetical conditions/assumptions and reason for their inclusion
Disclosures of subsequent events
Reliance on Specialist

Sources of information

Identification of assumptions and limiting conditions

Description of fundamental analysis as needed

Financial information relative to the report
Adjustments suggested to normalize financial statements
Projected/forecasted financial statements as applicable
Non-operating assets and liabilities
Computations procedures documented

Representations of the valuator, adapted to a calculation report

Client identification and limitations on the use of report
Disclosure of any contingency fee arrangement
A statement of financial interest
Whether or not the valuator is obligated to update the report
Responsible valuator

Appendices and exhibits

Purpose of calculation procedures

Statement of expression that the value is a calculated value

General description of calculation statement of limitations of a calculation of value engagement compared to a conclusion of value engagement.

Report

Calculation engagement is a limited scope business valuation and the report provides only a summary of how the valuation conclusion were determined. The basis of this valuation is generally based upon discretionary cash flow or EBITDA. The computation in these situations will use a multiple method if an industry specific model is available.  Otherwise it may be necessary to develop a capitalization model. Those entities requiring consideration other than these methods will be discussed as to how the scope of the engagement will be determined.

 

Conclusion of  Value

A conclusion of value requires the valuator to apply valuation approaches or methods deemed in the valuator’s professional judgment to be appropriate under the circumstances. The report reflects the financial analysis and the valuation conclusions used to arrive at the conclusion of value. The report contains the following:

Letter of transmission

Table of contents

Introduction:
Identification of subject valued
Purpose and use of valuation
Users of valuation
Description of interest being valued
Ownership size, nature, restrictions and agreements
Valuation date
Report date
Standard of Value and its definition
Scope limitations
Material matters considered
Hypothetical conditions/assumptions and reason for their inclusion
Disclosures of subsequent events
Reliance on Specialist
Denial of access to essential data
Jurisdictional exceptions and requirements

Sources of information

Description of fundamental analysis as needed
Historical Income Statement
Adjustment to normalize financial statements
Projected/forecasted financial statements including underlying assumptions
Non-operating assets and liabilities
Valuation approaches and method(s) considered by the valuator
Valuation approaches and methods(s) used by the valuator
Other items that influence the valuation
Site visit disclosure
Reconciliation of estimates and conclusion of value

Identification of assumptions and limiting conditions

Representation of member may include
Client identification and limiting conditions
Disclosure of any contingency fees
Statement of financial interest
Whether or not Valuator is obligated to update report
Responsible valuator

Qualifications of valuator

Appendices and exhibits

Report