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 sale 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

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Fax: (501)221-7206

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Little Rock, AR 72211


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