Business Valuations

Performing a Business Valuation

A company assessment commonly includes four major phases:

Phase I – Preliminary Steps:
An understanding of the client’s requirements and the specific purpose of the assessment.  Provest Inc will define the scope and terms of the valuation engagement.

Phase II – Data Gathering:
We compile information about your company through management interviews , research, document request lists and a facility tour.

Phase III – Research and Analysis:
This involves a review and analysis of company documents, financial statements, tax returns and other data. We also research the relevant economic factors, industry trends and influences, potential risk factors, comparable businesses and recent relevant completed transactions. We work with our clients to understand, recast and project the financial information and performance.

Phase IV – Valuation:
Once the relevant valuation methodologies have been determined, the value of the business is estimated by incorporating all of the insight gained during the analysis phase. All assumptions and results are reviewed with our clients for validity during our  presentation of the preliminary assessment report.  It is important to note that as business cycles change so will a company’s value in the marketplace.  Hence it is important to work closely with your professionals throughout the selling process.

A Closer Look at the Business Valuation Process:

Fair Market Value

Determining the fair market value of a business is a complex process with many variables that require consideration. Provest Inc analyzes a firm’s strengths, assets, financial performance and growth projections. We also appreciate and properly value the many intangibles inherent in any company that are not represented on static financial statements.

To analyze purchase price comparisons, we utilize proprietary databases containing operating data and historical records of similar businesses that have been sold in any given industry. Our constant market exposure provides us with a unique and current understanding of transaction values and deal structures in today’s marketplace.

By determining the justified market range of value that a fully informed buyer is likely to pay for a company, client’s mitigate the risk of losing a timely sale with a qualified acquirer by unrealistically overpricing the company, or leaving money on the table by under-valuing the business.


Proper interpretation and presentation of financial information is a crucial step in the process and has a significant impact on valuation. Financial statements are typically prepared for tax purposes, not for business valuation or company appraisal purposes, and do not accurately reflect the true profitability of a business. The valuator must be able to “read between the lines” of the financial statements and tax returns to present the total discretionary pre-tax income that would be available.

Our partners work closely with our clients and their CPAs to “recast” the company’s financial statements so that the valuation accurately interprets the true economic value of the business.

The Importance of a Business Valuation:

A Valuation is Critical to Resolve Business Sale Related Issues:

Valuations are essential when dealing with issues related to the full or partial sale of a business. A valuation will establish and defend the appropriate value for the company. When selling a business, our assessments help you to:

  • Avoid leaving cash on the table by selling below market value
  • Prevent overpricing the business, thereby making it unsaleable
  • Justify and defend the valuation expectation to the buyer
  • Attract as many qualified buyers as possible
  • Assist buyers to validate and secure financing


A Note about the Process:

The process of assessing a client’s business, if done right, is very revealing and deeply personal.   With that in mind take great care to select a professional that you trust and feel will represent you and your company in a manner consistent with your corporate values.   If you have questions please do not hesitate to give us a call 866-865-2983.