The APC Group provides valuation services to buyers and seller of businesses. We utilize in-house expertise and/or the services of an independent third party evaluator, as the circumstances dictate. We strongly recommend that a comprehensive valuation report be included in the offering package of any business being offered at $200,000 or above.

Definition of fair market value
The price at which property would change hands between a willing seller, who is not under any pressure to sell, and a willing buyer, who is not under any pressure to buy, both of whom have reasonable knowledge of all the relevant facts.

Benefits of a valuation
• Establishes an objective, quantifiable base for negotiations
• Justifies price for the business in buyer terms
• Forms the basis for transaction structuring
• Serves as additional input in arranging financing for a transaction

Generally Accepted Valuation Approaches
• Asset/Cost Based Valuations (provides an indicator of value only)
• Income Based Valuations (determines the present value of expected future cash flows generated by the business)
• Market Comparison Valuations (analyses supply and demand of buyers and businesses for sale and its impact on business value)

Information on which an insightful valuation is based
Valuations could be prepared upon investigation of historical financial information (financial statements and tax returns for the last three years) and interim financial statements, but should also take account of additional factors, such as:

Company specific
• Historical financial information, recast to reflect cash producing capability of the business
• Management and workforce (experience, depth of management, stability, reliance on a few “rainmakers”, etc.)
• Company size
• Customer diversity and stability
• Marketing plan and marketing avenues
• Existence of a business plan
• Supply factors: (i.e. supplier relationships, product availability, etc.)
• Company technology and manufacturing/delivery processes
• Capital structure (debt to equity ratios, debt terms, other financial ratios)
• Quality and reliability of company administrative operations and information
• Impression on walk-through
Industry
• Industry driving indicators
• Industry benchmarks for various financial ratios
• Barriers to entry
• Industry life cycle
• Company competitive advantages
• Market size
• Company’s market share
• State of the industry and growth prospects
• Competitors
Economic
State of the economy in general and its affect on a specific company and its related industry

Financial Modeling
APC Group also provides financial modeling services, which is the forecasting of financial results under various scenarios.

Benefits of financial modeling
• Provides the basis for a more detailed look at valuation of a business
• Assists buyers in determining the synergies that could be achieved from an acquisition
• Lays an overall plan for an investor with entry and exit points
• Forms the basis for a “game plan” to approach lenders with