What are the processes and methods of business appraisal or Business Valuation?
The past financial history of a business is not sufficient in and of itself in order to adequately estimate the true and complete value of a business. This is the case because past financial statements often leave out critical and crucial information that can greatly increase or decrease a company’s value, such as intangible asset value (beneficial contracts, below market operating costs, copyrights, agreements that are both, franchise and proprietary, etc.). Therefore, when a company is appraised the past financial history of operation is incorporated in order to forecast future gains throughout a much larger and more intricate method of valuation. The three most popular methods to Business Valuation are as follows: The Asset Method: The asset method uses appraisal approaches that entail a thorough and detailed review of the individual assets of the company. Usually in this method, all resources and liabilities are adjusted to a standard of value, like fair market value. The major wea
