Reliance Business Valuation (page 1 of 3)

What is Your Business Worth?

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There are a number of reasons business owners should consider a business valuation including: Determining the sales price if you are considering selling your business Measurement tool that evaluates progress toward management goals Establishing fair market value for shareholder interest Ownership dissolution or buy-out Buy/sell agreements Succession/Exit Planning Tax Purposes Estate and gift planning Employee Stock Ownership Plans Personal Reasons Split up of family assets in a divorce Venture Capital and Other Forms of Financing We prepare valuation reports based on critical information, unique to your business. The range of value for the company is determined by using evaluation methods which may include industry earnings, capitalization, debt capacity, discretionary cash ow analysis, and other methods appropriate to your particular business and industry.

Reliance offers several types of Valuation Products:

Informal Valuation. This valuation is a restricted use valuation and typically consists of 10-15 pages and is designed for businesses under $500,000 in revenues. The calculation concentrates on seller cash ow. The seller cash ow is multiplied by a multiple (derived from rule of thumb industry averages and comparable company transactions) to arrive at a valuation price. This valuation does not take into account the balance sheet as it is assumed that the hard assets (equipment) that are purchased have already been valued in the seller cash ow calculation. The Informal valuation is bare bones valuation often used for sellers of smaller businesses who are trying to determine if it makes economic sense to put their business up for sale. The report is priced starting from $1,500. Value Analysis. This valuation is a restricted use valuation and typically consists of approximately 40 pages and is designed for businesses between $500,000 and $1.5 million in revenues. The report analyzes industry conditions and the three approaches to valuation are calculated and discussed. This report will concentrate on the current and historical prot and loss statements, adjusted seller cash ow and a comparable sales (market) approach with little emphasis on the balance sheet. The report is priced starting from $2,500 - $3,000

Reliance Accounting is located at 11516 W. 183rd Street, Unit NW in Orland Park, IL 60467 708-478-3982
Copyrighted 2006 Reliance Accounting. All Rights Reserved. - PDF Design by Boojazz Studios.

www.relianceaccounting.com

Reliance Business Valuation (page 2 of 3)

Formal Valuation. This valuation is a restricted use business valuation and the report typically consists of 80 pages and is suited for organizations with sales between $1.5 million and $5 million in revenues. The report emphasizes ratio, trend and common size analysis. A discounted cash ow model is also utilized. In addition to the earnings of the company, the balance sheet is a key component of the analysis. This report is typically used where there is a need to have a valuation that complies with Revenue Ruling 59-60. Discount for lack of control and marketability are calculated using various valuation techniques. The rms cost of capital is also used in the analysis to discount the projected cash ow of the business. The report is priced starting from $5,000 - $7,000. M&A Valuation. This report is designed for middle market organizations with sales in excess of $5 million. This valuation is completely customized and can range in size from 30-200 pages. The basis of the valuation is future performance, emphasizing the discounted cash ow model as well as private and public company comparative analysis. Due to the customized nature of the report, please contact us for pricing. Comprehensive Valuation. This valuation is available for specialized purposes such as ESOPs, bankruptcy, estate tax, litigation, and divorce. The turnaround time on this valuation is approximately 3 to 6 weeks. Due to the customized nature of this report, please contact us for pricing.

Steps in the Valuation Process

Client and Valuation rm sign an engagement letter (50% down at signing of engagement letter) - Objective of valuation - What interest is being valued - Pricing of the Valuation - Expectations of Parties - Other Client lls out condential valuation prole with/without assistance of valuation specialist (depending on client preference) Valuation specialist obtains nancial documents from client. Client and valuation professional discuss the condential valuation prole - Current lease and xed costs - Computer and nancial accounting systems - Financial and industry trends - Competition, pricing dynamics, prot margins etc.

Reliance Accounting is located at 11516 W. 183rd Street, Unit NW in Orland Park, IL 60467 708-478-3982
Copyrighted 2006 Reliance Accounting. All Rights Reserved. - PDF Design by Boojazz Studios.

www.relianceaccounting.com

Reliance Business Valuation (page 3 of 3)

The Valuation professional than uses the following valuation techniques:
Analyzes nancial statements (primarily seller discretionary cash ow) and the condential valuation prole Uses various services (i.e. BIZCOMPS) to arrive at comparable practice sales and multiples used to compute value based on the practices cash ow Analyzes the information and determines what method (Market, Income or Asset) or combination of methods to be used in the valuation Values institutional intangible assets (business location, operating procedures, trained staff, client base etc.) Values professional intangible assets (owners personal knowledge, experience and reputation.) Calculate discount for lack of control and marketability (if applicable) The valuation for the Informal, Value Analysis or Limited Formal valuation will take 10-15 business days to complete once Reliance has obtained the required nancial information and completed Company Prole. Reliance will charge an additional fee if the valuation is needed on an expedited basis. At the 10-12 business day timeframe, the valuation specialist will issue a draft report which will be discussed with the client to conrm the underlying data on which the valuation was performed is correct. A nal draft is submitted to the client via express mail by the post ofce. Overnight FedEx deliveries and additional copies are offered for an additional cost.

Reliance Accounting is located at 11516 W. 183rd Street, Unit NW in Orland Park, IL 60467 708-478-3982
Copyrighted 2006 Reliance Accounting. All Rights Reserved. - PDF Design by Boojazz Studios.