Is business valuation the same as business evaluation?

A business evaluation is not necessarily the same as a business valuation. Business evaluation is a much broader term that can refer to auditing any aspect of a business, such as business processes, phone systems, or overall efficiency, but does not explicitly refer to evaluating the monetary value of the business. In contrast, business valuation refers exclusively to establishing the firm’s monetary value. Colloquially, people often use the two terms interchangeably, so someone looking for a business valuation may search online for business evaluation services.

Is a business appraisal the same as a business valuation?

Although colloquially, the two terms are often used interchangeably; business appraisal and valuation refer to the same industry but two separate service tiers, translating into different fees and scopes of valuation work. A business valuation, also called “Calculation” (American Society of Appraisers-ASA) or “Calculation Engagement” (AICPA, IBA, NACVA), is a lower-level analysis generally intended for a client to use for internal planning purposes. A business appraisal (ASA) or valuation engagement (AICPA, IBA, NACVA) is a much more complex and in-depth analysis process of determining the firm’s economic value, often based on deeper market research and more meticulous documentation. Appraisals are better suited for external purposes such as tax, litigation, and financial reporting, as the extensive documentation can withstand intense scrutiny. Need help determining which level of valuation service your client needs? Give us a call so we can help you determine the tier of business valuation service that best suits your client’s case.

How much does a business valuation cost?

The cost of a business valuation depends heavily on the purpose and scope of the valuation (see previous FAQ), the complexity of the assignment, and the level of financial and legal risk to the client. There is no “one size fits all” solution in valuation, and it is impossible to provide a meaningful quote that fits the wide variety of needs of different clients. Click here to get a free quote specific to your valuation needs. We’ll get back to you with a quote by the next business day.

How long does valuing a business take?

Our valuation assignments begin when we have a signed engagement letter, a retainer, and the information we need to perform our work. For a small-to-mid-size project, a comfortable schedule is six weeks to deliver a draft report. If you require faster delivery, we can usually accommodate you. Large or very complex projects can take 3 to 8 months. Please contact us to discuss the timing of your valuation project.

My client needs a valuation in a niche industry. Do they need an industry expert to determine company value?

AVGI has valued thousands of companies across many specialized industries. In our experience, business valuation know-how is more important than specific industry knowledge in producing an accurate valuation and favorable outcome for the client. When we work on a valuation assignment in an unfamiliar industry, our team collaborates extensively with industry experts to get the necessary information to complete a thorough valuation analysis. We have never encountered a valuation assignment that we could not perform due to a lack of industry knowledge.

Can my client use their CPA as their business appraiser?

Some accountants also provide valuation services, often on a part-time basis during their slow season. But while it is difficult enough to keep up with all the changes in tax law, financial reporting requirements, and other changes dictated by the AICPA and FASB, it is virtually impossible to also keep up with the valuation literature and changes mandated by the appraisal organizations. Even accomplished professionals cannot be the best at everything. Part-time valuators may be adequate for valuing small businesses, where the consequences of error or imprecision are small, but it is risky to engage a part-time valuator in more complex situations or when the stakes are high.

Business Valuation Services

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Abrams Valuation Group, Inc. is a leading business valuation firm founded by Jay B. Abrams, a pioneer in his field, who has developed groundbreaking quantitative valuation techniques novel to the industry. The AVGI team applies standard valuation methods and uniquely adapts Abrams’ original business valuation methods to client cases, resulting in precise numbers and thorough valuation analysis you can rely on to produce the most accurate outcome for your client.

Hundreds of lawyers, accountants, and financial planners call on AVGI to provide expert analysis of company valuation issues for their clients’ litigation, tax planning, and business transaction purposes. Whether your client needs a small business valuation for a basic operating business or a business appraisal for a complex exotic asset structure, AVGI has performed thousands of successful appraisals for businesses ranging from small start-ups to large multi-billion dollar firms.

With our advanced quantitative valuation capabilities, we have delivered compelling results for complex and straightforward cases alike, saving clients like yours millions of dollars while maintaining an audit success rate of over 99%.

Business Valuation Services

John Pullen, Ph.D.

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