The Market Approach to Valuing Businesses / Edition 2by Shannon P. Pratt
Pub. Date: 11/25/2005
The market approach is an increasingly popular way to determine a business's valuefor both buyers and sellers. Praised for its objectivity, this approach reviews the annual sales and other financial variables of comparable businesses for guidance in valuation. When well implemented, the market approach is the model most favored by the IRS and the United… See more details below
The market approach is an increasingly popular way to determine a business's valuefor both buyers and sellers. Praised for its objectivity, this approach reviews the annual sales and other financial variables of comparable businesses for guidance in valuation. When well implemented, the market approach is the model most favored by the IRS and the United States Tax Court.
You could say that Shannon Pratt wrote the book on the market approach. Published in 2000, his groundbreaking book The Market Approach to Valuing Businesses set the standards and explained the theory and methodology for this evolving approach. Expanded and updated to encompass the latest rulings and source data, the new Second Edition is an indispensable reference for beginning and experienced appraisers, intermediaries, buyers, sellers, attorneys, CPAs, or judges. It covers:
- Both The Guideline Public Company Method and The Merger & Acquisition (Transaction) Method
- A discussion of past transactions, offers to buy, rules of thumb, and buy-sell agreements
- Pricing for purchases and sales
- Valuation for gift and estate taxes and marital dissolution
- Shareholder matters, including dissenting stockholder suits and resolutions of value under buy-sell agreements
- How to find and analyze comparative market transaction data
- Analysis of the most recent cases in family law, tax, and shareholder dispute courts
Complete with sample cases, an extensive bibliography, an appendix on data resources, the Quantitative Marketability Discount Model, and a list of business brokers and their specialties, The Market Approach to Valuing Businesses is an authoritative, state-of-the-art treatise for both valuation professionals and nonprofessionals.
- Publication date:
- Edition description:
- Product dimensions:
- 9.21(w) x 6.14(h) x 0.94(d)
Table of Contents
List of Exhibits.
Notation System Used in This Book.
PART I: DEFINING MARKET MULTIPLES AND MARKET APPROACH METHODS.
1. Defining Market Value Multiples.
2. The Guideline Public Company Method.
3. The Guideline Transaction (Merged and Acquired Company) Method.
4.Other Market Methods.
PART II: FINDING AND ANALYZING COMPARATIVE MARKET TRANSACTION DATA.
5. Finding Public Company Market Transaction Data.
6. Finding Merger amd Acquisition Market Data.
7. Adjusting Financial Statements.
8. Comparative Financial Analysis.
PART III: COMPLILING MARKET VALUE TABLES AND REACHING A VALUE CONCLUSION.
9. Compiling Useful Market Value Tables.
10. Selecting, Weighting, and Adjusting Market Value Multiples.
11. Control Premiums and Minority Discounts.
12. Discounts for Lack of Marketability.
PART IV: SAMPLE MARKET APPROACH CASES.
13. Small-Size Service Company Sample Case-Sub Shop.
14. Medium-Size Service Company Sample Case-Software Developer.
PART V: IMPORTANT ASPECTS OF USING THE MARKET APPROACH.
15. Reconciling Market Approach Values with Income and Asset Approach Values.
16. Does Size Matter? Evidence from Empirical Data.
17. Common Errors in Implementing the Market Approach.
18. The Dismal Track Record of U.S. Market Acquisitions.
19. The Market Approach in the Courts.
Appendix A: Bibliography.
Appendix B: Data Resources.
Appendix C: International Glossary of Business Valuation Terms.
Appendix D: The Quantitative Marketability Discount Model.
Appendix E: Pratt's StatsTM Data Contributors.
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