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Showing 305–320 of 382 results
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Court rejects shortcut in favor of detailed analysis
July / August 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 409
Abstract: A common rule of thumb for calculating reasonable royalties in patent infringement cases has been to presume the inventor and manufacturer split pretax profits 25/75. In Uniloc USA Inc. v. Microsoft Corporation, the U.S. Court of Appeals for the Federal Circuit called this methodology “fundamentally flawed.” This brief article summarizes this case, noting that the decision underscores the importance of hiring a credentialed financial expert and establishing a solid connection between an expert’s analytical tools and case facts. Citations: Uniloc USA Inc. v. Microsoft Corporation, Case Nos. 2010-1035 and 2010-1055, Fed. Cir., Jan. 4, 2011. Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 589, 1983.
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Settling shareholder disputes — Valuators build a bridge over troubled waters
July / August 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 659
Abstract: A company’s owners tend to get along when times are good, but economic downturns can bring out the worst in shareholder relations. This article uses a hypothetical case study to illustrate how valuators can serve as expert witnesses or consultants, helping settle shareholder disputes both in and out of court. Valuators are objective outsiders who can defuse emotions and help the remaining owners refocus their attention on building and preserving value.
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Projected cash flow — History doesn’t tell the whole story
July / August 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 821
Abstract: Projected cash flow is an important measure of future economic benefits. Although some companies may grow at a relatively constant rate, a business’s historic cash flows may not be an accurate measure of its expected future performance — especially in an uncertain business climate. This article discusses the methods valuators use to project cash flow and notes the ways cash flow projections may help owners manage cash flow more efficiently or survive the monthly (or off-season) cash crunch.
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Purchase price allocations: Acquiring minds want to know
July / August 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 1011
Abstract: When planning to merge with or acquire another company, a business owner needs to identify what’s actually being sold and estimate what those assets are really worth. Often the most valuable assets — such as goodwill, brand names, customer lists and patents — don’t appear on the balance sheet. This article explains how a preacquisition purchase price allocation can help an owner determine whether a purchase price is reasonable and ensure a transaction makes sense from a financial perspective.
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Owners’ compensation: Too much, too little, or just right?
May / June 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 612
Abstract: The question of owners’ compensation is frequently debated in shareholder disputes, divorces and IRS inquiries. Owners’ compensation can vary significantly from company to company depending on whether owners take too much — or draw minimal salaries because they undervalue their contributions or because the business is cash poor. This article explains how a valuator can help a company estimate a range of reasonable replacement compensation that eliminates “owner bias” and adjusts income to a level that reflects economic reality based on objective market data.
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Why “double dipping” may become an issue
May / June 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 939
Abstract: A business is often the most significant asset in a marriage. When a marriage ends in divorce, it can also become the most contentious. The term “double dipping” refers to a situation in which a spouse receives double payment for a single asset. Double dipping can become a controversial issue in marital dissolution cases requiring business valuations — depending on the state. This article mentions decisions in recent cases where the issue of double dipping has arisen. The article also notes that, to achieve fair outcomes, state courts consider the unique facts and circumstances of each case along with state statutes and case law in the jurisdiction in which the divorce is being decided. Citations: In re Marriage of Blazer, No. HO31574, Cal. App., Aug. 25, 2009. In re Marriage of White, 192 Cal.App.3d 1022 [237 Cal. Rptr. 764]. Sander v. Sander, (AC26291), Conn. Super, June 20, 2006. Steneken…
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Economic damages 101
May / June 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 662
Abstract: Business disputes often result in one party losing money. It’s up to the legal system to award economic damages. This article discusses some approaches to quantifying economic damages, including the before-and-after method and the sales projection method. The article also notes potential pitfalls and contentious issues that may arise. The article points out that estimating lost profits is a natural extension of a valuator’s skill set.
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Valuators help tackle newly reinstated estate tax
May / June 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 724
Abstract: Succession and estate planning is a chore that business owners tend to put off. In light of the new tax laws and potential tax savings opportunities, it’s important to forge ahead with estate planning. This article briefly explains the exemption and rate changes mandated by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, and shows how these changes affect succession planning. A sidebar explains the status of family limited partnerships (FLPs) and grantor retained annuity trusts (GRATs) under the act.
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Need to know: FAQs about key person discounts
March / April 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 323
Abstract: The risk of centralized management typically is taken into account in the company’s future earnings or discount rate. In some cases, however, one key person has unique skills, technical knowledge, experience or relationships that would be difficult to replace or replicate. This brief article explains how valuators attempt to quantify the impact of loss of a key person on value.
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How valuators approach value — A valuation primer
March / April 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 867
Abstract: Determining the value of a business is a complex endeavor. This article provides a primer on the most commonly used valuation approaches and methods to help readers gain a better grasp of the ins and outs of business valuation and be better able to evaluate an expert’s work. The article describes the income, market and cost approaches as well as several other methods valuators use to refine their analyses.
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Who owns goodwill? — The case of Howard v. Commissioner
March / April 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 692
Abstract: Goodwill is an intangible asset that arises from a business’s name, reputation, customer loyalty, location, products and other similar factors. The classification of goodwill as personal or business can have important tax and legal consequences. This article looks at a recent case, Howard v. Commissioner, that illustrates some of these consequences, including how noncompete agreements may get in the way of taxpayer attempts to claim personal goodwill when they retire. Case citations: Howard v. Commissioner, U.S. District (E.D. Wash.), No. CV-08-365-RMP, July 30, 2010. Norwalk v. C.I.R., U.S. Tax Ct., T.C. Memo 1998-279, 1998 WL 430084.
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Long-term strategies to boost cash flow — and value
March / April 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 913
Abstract: Companies that maximize cash flow are worth more to investors. But it may be unrealistic to focus on the obvious cash flow improvement targets — revenue and costs — when demand is flat and many businesses have cut back their overhead. This article presents some cash flow management techniques that may help businesses squeeze more out of existing operations.
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Understanding liquidation value: Are you in the know?
January / February 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 356
Abstract: Today’s faltering economy has meant that some businesses’ liquidation values exceed their going-concern values. This brief article notes the difference between going-concern value and liquidation value and explains the ins and outs of estimating liquidation value. It also mentions some of the factors valuators consider when going-concern value is no longer the best option.
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Valuators cover the gamut from A to Z
January / February 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 625
Abstract: A credible valuation that can withstand professional scrutiny requires diligent research and analysis of both the business interest itself and relevant valuation data, documented in an explanatory report. This article notes that valuation services can be helpful in numerous situations, including transaction planning, financial restructuring, litigation support and succession planning, pointing out that a valuator’s real skill is transforming assembled information into a meaningful valuation analysis.
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Re-evaluating discount rates in a distressed economy
January / February 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 712
Abstract: Investors require a certain return for taking on the risk of investing in a business. Valuators measure risk using discount (and capitalization) rates and measure return using future income streams. Estimating discount rates is a complex task, even in the best of times. But the volatile economy has forced valuators to re-evaluate traditional methods of quantifying discount rates. This article discusses some of the issues facing valuators as they estimate discount rates in the current business climate.
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Risk assessment — The added value of benchmarking
January / February 2011
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 1116
Abstract: All else being equal, the higher a business’s risk, the lower its value. Benchmarking a business against its competitors — or itself over time — is one way that valuators assess risk. This article looks at the components of a comprehensive benchmarking study and how various factors, including size, growth, liquidity and profitability, affect risk. The article points out that owners and managers can use a comprehensive benchmarking study as a strategic management tool and to help identify a business’s strengths, weaknesses and trends.