OLD Inc Business Brokers offer a quick and confidential MPSP (Most Probable Selling Price) valuation service not only for clients wishing to sell but for those needing a third party opinion on the value of their business.
Because privately owned companies tend to keep reported profits and thus taxes as low as possible, financial recasting is an important element to understanding the earning capacity of a business. OLD Inc employs recasting which allows meaningful comparisons with other investment opportunities. Financial recasting eliminates such items as excessive and discretionary expenses and nonrecurring revenues and expenses from the historical financial presentation (Non Operational). Also, debt and interest expense are eliminated since they reflect the financing decisions of the current owner and may not represent financing preferences of a new owner. Similarly, depreciation and amortization are non-cash expenses and therefore recast.
In order to prepare a MPSP (Most Probable Selling Price) valuation we would need the following information from you:
1. Year end accounts for the past three years as prepared by your accountant.
2. Year to date management accounts including income statement and balance sheet.
3. Inventory/Stock list at current market value.
4. Furniture, fixtures and equipment listed at current market value.
5. A separate copy of the profit & loss statement(s) with references to any of the following, which may apply to a line item:
a. Any non-business items, such as personal telephone, motor vehicle expenses, life insurance, phantom employees, living expenses.
b. If there is any salary or owner “drawings” in the payroll figures, please state how much the salary/draw was.
c. Any non-cash items, such as depreciation, amortization.
d. Any non-recurring or one-time expenses or income. For example the legal costs to defend against a law suit, or the
sale of an asset.
e. Any item (sales, cost, or expense) that does not belong to this business.
f. Any item that would change for the new owner, such as a rent increase.
6. The explanation of each item noted in number 5, above. This needs to be on a separate piece of paper.
7. The number of years that the business has been operating:
8. The number of years the present owner has owned the business:
9. A list of your competitors and an assessment of how much competition they are for the business:
10. Factors that are affecting the market for your business’s product AND any factors that make your business unique or differentiate it from the competition.
For a no-obligation and confidential chat please telephone Rebecca on 334 456 8528. Valuations cost between $1500 and $4500 (Please ask Broker for UK fee schedule) depending on the size of the business. We can normally perform and deliver the valuation to you within 10 business days.
Please note that the MPSP is a limited assessment MPSP, which is defined by the International Business Brokers Association as “that price for the assets or shares intended for sale which represents the total consideration most likely to be established between a buyer and a seller considering compulsion on the part of either the buyer or the seller, and potential financial, strategic or non financial benefits to seller and probable buyer”.
The sole purpose of the MPSP analysis is to determine in the Broker’s Opinion, the likely and most reasonable asking price in the potential sale of a business enterprise and, or its assets.
OLD Inc or the Broker, does not warrant any information and is not responsible for any results whatsoever as a result of, or as a consequence of, using the information provided in this report. It is understood that market conditions change and vary and hence this cannot be warranted in any way. Accordingly, OLD Inc or the Broker makes no representations, expressed or implied, as to the validity of the pro forma and or any other forward looking projections.
All information given will be treated in the strictest of confidence.
