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Steps for a Business Appraisal
At BMK, we perform the following steps to arrive at our opinion of value for your business or business interest:1) Determine the parameters of the engagement, provide a fee estimate and obtain a signed engagement agreement.
2) Gather information from the client.
3) Prepare a narrative regarding the history and nature of the business.
4) Evaluate the economic and industry conditions as of the appraisal date.
5) Perform financial analysis, including, but not limited to:
a) Analysis of the historical financial trends of the business6) Normalize the income statements to amounts the hypothetical buyer could expect.
b) Comparison of the financial condition and performance of the business to other businesses in the same industry (ratio analysis)
7) Determine a value indication using the income approach, market and asset approaches. Reconcile the value indications to come to a single estimate of value.
8) Minority Interest: Apply appropriate discounts
9) Prepare a written report