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Returning Value Blog

Look To the Future With a QOE Report

Posted by Jessica L. Pagan, CPA on Dec 02, 2021

Are you thinking about merging with or acquiring a business? CPA-prepared financial statements can provide valuable insight into historical financial results. But an independent quality of earnings (QOE) report can be another valuable tool in the due diligence process. It looks beyond the quantitative information provided by the seller’s financial statements.

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Posted in Business Valuation

Put Your Company's Financial Statements to Work for You.

Posted by Jessica L. Pagan, CPA on Dec 17, 2020

It’s almost time for calendar-year businesses to prepare their year-end financial statements. If used correctly, these reports can be a valuable management tool. Use them in benchmarking and forecasting to be proactive, not reactive, to market changes.

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Posted in Business Valuation

The Art and Science of Goodwill Impairment Testing

Posted by Michael D. Machen, CPA, CVA on Dec 06, 2019

Goodwill shows up on a company’s balance sheet when the company has been acquired in a business combination. It represents what’s left over after the purchase price in a merger or acquisition is allocated to the company’s tangible assets, identifiable intangible assets and liabilities. Periodically, companies must test goodwill for “impairment” — that is, whether the carrying value on the balance sheet has fallen below its fair value. This assessment can be complicated.

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Posted in Business Valuation

Predicting Future Performance

Posted by Jessica L. Pagan, CPA on Jun 13, 2019

CPAs typically report historical financial performance. But sometimes they’re hired to predict how a company will perform in the future.

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Posted in Business Valuation

Which Intangibles Should Private Firms Report Following A Merger?

Posted by Michael D. Machen, CPA, CVA on Jun 15, 2018

2018 is expected to be a hot year for mergers and acquisitions. But accounting for these transactions under U.S. Generally Accepted Accounting Principles (GAAP) can be complicated, especially if the deal involves intangible assets. Fortunately, the Financial Accounting Standards Board (FASB) offers a reporting alternative for private companies that simplifies accounting for new business combinations, avoiding a lot of red tape.

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Posted in Business Valuation

ESOPs Offer Businesses Tax and Other Benefits

Posted by Nick Wheeler, CPA on Jul 28, 2017

With an employee stock ownership plan (ESOP), employee participants take part ownership of the business through a retirement savings arrangement. Meanwhile, the business and its existing owner(s) can benefit from some potential tax breaks, an extra-motivated workforce and potentially a smoother path for succession planning.

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Posted in Business Valuation

Tips to Optimize the Value of Your Privately Held Company

Posted by Michael D. Machen, CPA, CVA on May 24, 2017

Say you currently have a direct ownership interest in a privately held company. Or, perhaps your company granted you stock options, stock appreciation rights, or some other type of stock-based compensation. Whatever the circumstances may be, you may consider yourself fortunate; but do you really know what your business interest is worth?

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Posted in Business Valuation

Risk and the Rates of Return

Posted by Michael D. Machen, CPA, CVA on Feb 15, 2017

The required rate of return is just one of many components used in the calculations used in corporate finance and equity valuation. It goes beyond identifying the return of the investment, and factors in risk as one of the essential considerations in determining potential return. 

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Posted in Business Valuation

When Fifty Bucks is Worth More Than Fifty Bucks

Posted by Jessica L. Pagan, CPA on Aug 25, 2016

Understanding How Present Value Works in the Context of Business Valuation

Consider the following scenario: You and a friend are taking in a ballgame one lovely evening at the old ballpark. All is well until that friend of yours mentions that he forgot his wallet. Said friend, then sheepishly asks if he can borrow $50 to fund his consumption of requisite ballpark goodies—a hot dog, a frosty beer, peanuts (what would a ballgame be without peanuts?) and ice cream.

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Posted in Business Valuation

What's Your Small Business Worth?

Posted by Michael D. Machen, CPA, CVA on Aug 09, 2016

How to value business interests

It is often difficult to put a price tag on a company that is not publicly traded. For instance, the value of a family-owned business will typically exceed the total value of the hard assets such as equipment and inventory. In addition, assigning a value to intangible assets such as goodwill is a difficult proposition at best.

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Posted in Business Valuation

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