Information Needed to Prepare a Business Valuation Report
- A detailed description of what is for sale. Is the entire business for sale, or just the assets? Is this going to be a stock sale?
- Details about what is not for sale. Are there specific assets which will not be sold? Are there income streams which will be held back?
- A history of the company, so the appraiser can learn about the company
- Balance sheet for each quarter for the past three to five years (depending on how long the company has been in existence)
- Income statements for each quarter for the past three to five years (depending on how long the company has been in existence)
- Company financial forecasts (balance sheets and income statements) for five years, if available
- Details on the industry and the company's market share in that industry
- Detailed demographic information of the company's market
- A detailed competitive analysis, including top competitors and their products/services
- The company's legal type and ownership structure, including owners and percentages of ownership
- Tax returns for the past three to five years
- Discussion of any audits or IRS scrutiny of the company, and the results of those audits
- All litigation (whether ended or continuing) for the past five to ten years
- Resumes of all company owners (unless a public company), officers, and top management executives
- Current monthly payroll data - number of employees and their functions
- A current organization chart
- A summary of product inventory amounts for each product (from physical inventory) for the past three years
- A listing of all current suppliers
- Information on current customers - a customer list, if possible
- Payment history of customers, including an accounts receivable aging report, for the past three years
- Information on employee benefit plans and costs
- Information on contracts with top executives and managers
- Information on obligations for retirement plans, profit sharing, stock options, and bonuses
- Listing of all intellectual property - patents, copyrights, trademarks/service marks - and all license agreements
- A listing of all business advisers - attorney, CPA, consultants and any contracts or retainers.
This may sound like a lot of information, but all of it is necessary for a valuation expert to gain a complete understanding of the company's financial position, obligations, and management.
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