YBAWS

I am inviting you into a world of misapplication of rules of thumb or public market PEs for FMV determination, “My company is worth $10 million because my older brother sold his business 7 years ago for 4x income, so I need to get at least 5x.” Or this one, “I have a website like Facebook for ant farmers, I made $10,000 in ad revenue last year. [ 659 more words ]

https://www.ybaws.com/fmv-mixed-signals-and-misunderstanding/

FMV: Mixed Signals and Misunderstanding I have a website like Facebook for ant farmers, I made $10,000 in ad revenue last year. Facebook has a PE ratio of 56x, can you find a buyer for me that will give me $500,000?

The previous entry spoke about the need to get the business owner to differentiate between FMV and transaction value for their estate purposes. Many owner’s expectation of their company’s sale value far exceeds reality in today’s market. Most common contributors to the valuation expectation gap are the inappropriate use of rules of thumb, public market multiples and comparables. This entry continues the previous by running a scenario. [ 530 more words ]

https://www.ybaws.com/transaction-value-illustrated/

Transaction Value Illustrated Transaction Value is what you want to get your retirement cash. Start with what you need to retire, then calculate the transaction value your company has to sell for. Is Transaction Value higher th…