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    Summary of Gregory R. Caruso's The Art of Business Valuation
    Summary of Gregory R. Caruso's The Art of Business Valuation
    Summary of Gregory R. Caruso's The Art of Business Valuation
    Ebook78 pages44 minutes

    Summary of Gregory R. Caruso's The Art of Business Valuation

    By IRB Media

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    About this ebook

    Please note: This is a companion version & not the original book.

    Book Preview: #1 The price of a business is what someone is willing to pay for it. Price includes the quality of the sales process, negotiation, emotion, economic demand, timing, luck, and financing.

    #2 The process of valuing a business involves applying established analytical methods and preset assumptions to what is known or knowable about the company in order to estimate its value as of a specific date.

    LanguageEnglish
    PublisherIRB Media
    Release dateFeb 15, 2022
    ISBN9781669348726
    Summary of Gregory R. Caruso's The Art of Business Valuation
    Author

    IRB Media

    With IRB books, you can get the key takeaways and analysis of a book in 15 minutes. We read every chapter, identify the key takeaways and analyze them for your convenience.

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      Book preview

      Summary of Gregory R. Caruso's The Art of Business Valuation - IRB Media

      Insights on Gregory R. Caruso's The Art of Business Valuation

      Contents

      Insights from Chapter 1

      Insights from Chapter 2

      Insights from Chapter 3

      Insights from Chapter 4

      Insights from Chapter 5

      Insights from Chapter 6

      Insights from Chapter 7

      Insights from Chapter 8

      Insights from Chapter 9

      Insights from Chapter 10

      Insights from Chapter 11

      Insights from Chapter 12

      Insights from Chapter 13

      Insights from Chapter 14

      Insights from Chapter 1

      #1

      The price of a business is what someone is willing to pay for it. Price includes the quality of the sales process, negotiation, emotion, economic demand, timing, luck, and financing.

      #2

      The process of valuing a business involves applying established analytical methods and preset assumptions to what is known or knowable about the company in order to estimate its value as of a specific date.

      Insights from Chapter 2

      #1

      Business valuation is the process of taking a subject company and, through the application of different models, estimating a value. Different models work best in different situations. The selection of the correct model is done using professional judgment, and the process of choosing and screening the inputs for comparability is key to a supportable valuation.

      #2

      The market approach uses the theory of substitution. Market comparable sales are substituted for the company being valued. The income approach examines what an investor would pay for a business, based on its cash flows. The asset approach estimates the current value of the company's individual assets.

      #3

      Business valuation engagements fall into two categories: calculations of value and conclusions of value. The former involves the simple flat-spreadsheet estimate of value, whereas the latter is a full valuation engagement where the valuation analyst had access to all the necessary data to determine the estimate of value.

      #4

      The notion of standards of value is extremely important in business valuation. It is the basis for all assumptions made during the process. The two parties to the theoretical transaction may have very different views of the value of the business.

      #5

      The fair market value of a business is the price a hypothetical buyer and seller would agree on, based on the facts and circumstances of the business.

      #6

      When it comes to valuing a target entity, a valuation analyst must first examine and understand the market of potential buyers. A pool of potential buyers comprised exclusively of financial entities would likely find no synergistic value in the target entity.

      #7

      Fair value is the price an asset or liability would sell for in an arms-length transaction. It is an exit price for a particular asset or liability. It could be a stand-alone asset or liability or a collection of assets and liabilities, such as a reporting unit or whole business.

      #8

      There are two types of courts in the United States: courts of equity, which are supposed to make things right and produce fair and equitable results, and courts of law, which are presumed to apply the law even if the result does not seem fair or equitable.

      #9

      Whenever doing a business valuation for litigation, make sure the court is using the correct standard of value. Ask your client's attorney about the standard of value to be applied. If they don't know, check on your own. Just Google the case law under a search such as, Business Valuation, Standard of Value, Divorce, New Jersey.

      #10

      The standard of value is a subtle concept that is present in every assumption made throughout the business valuation. It is the buyer’s and seller's bias, limitations, and advantages that are reflected in the final value determined.

      #11

      The purpose of the valuation and the standard of value are often linked together. The purpose will often define the user and often

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