Balance Sheet Analysis and Business Appraisal Practice - Part 1

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Balance Sheet analysis is one of the most overlooked Approaches in business valuation. The Asset Approach is what the valuator should tackle FIRST in order to realize that the Net Adjusted Assets will yield a normalized EQUITY value. This is the starting point in determining a conclusion of value.

We look at the importance of fixed asset analysis, including machinery and equipment appraisal, in the business valuation process.

Some of the areas to be explored include:

How to utilize the Balance Sheet so that it becomes an integral and critical component of the valuation engagement process
To identify when the fixed asset section of the Balance Sheet requires special value consideration
How to determine which fixed assets require a special “external” appraisal
To understand that each account on the Balance Sheet must be given consideration when determining their fair market value
To understand the built-in gain (“BIG”) tax and how to account for this deduction
To provide the business valuator with Word and Excel tools and additional analyses to improve and support your conclusion of value

Ronald D. Rudich

CPA, MS, MCBA, CVA/ABAR/MAFF, CM&AA, CMEA, BCA

Mr. Rudich's primary area of expertise is in the valuation of closely held businesses, litigation support services, and machinery and equipment appraisals. Mr. Rudich performs the following valuation services: scrutiny and analysis of an opposing business valuation, preparation of deposition questions, gift and estate tax related issues, marital dissolutions, pricing of transactions and structuring analysis including mergers, acquisitions, dispositions of business property, going concern opinions, dissenting shareholder issues and business loss quantification analysis. Mr. Rudich has prepared many business valuations and has testified in court cases, and depositions involving valuation of closely held businesses. He has been admitted as an expert witness in cases involving business valuations, divorce proceedings and bankruptcies.