One or two complete document packages are
typically prepared for a given client. Each of the packages contains the Market Value and
Profit Sources Analysis Documents, plus all the respective support, background and other
material resources. This allows one package to be forwarded to the client and one package to be
retained by the client's agent/CPA, for their file. When the project is initially
discussed, clients will often authorize a Base Valuation which considers their current
situation (most recent year end), a 5 Year Analysis (second valuation based upon 5 years
of financial input), and/or a Proforma. A Proforma considers a past or projected up-coming
year of the firm as its basis for financial performance. The Proforma (a complete
additional valuation) provides a "future business worth estimate" illustrating
graphically how initial, interim and/or longer term financial investment(s) become
manifest in the operation's growth and related fair market value. When an HBVS Base
Valuation and Proforma is used as a part of a lender's input criteria for a given
candidate business venture, it allows for a more comprehensive risk/reward funding
decision.
Also, P/E Ratios are calculated on final values and noted in the accompanying cover
letter. (Not P/Es in the 20s typical in post IPO scenarios, but P/Es based upon the real
net profit to value relationship, and contingent bottom line investment opportunity.)
Document Package Contents: (Key Items Only)
- HBVS Valuation Documents
- Cover Letter With Calculated P/E Ratio(s)
- Industry specific market/media research
- Full Description of Methods/Formulas
- HBVS Verification/Justification
- Prior Client Lists/Letters
- "Seller's/Buyer's 10 Commandments"
- Table of Capitalization Rates - P/E ratios
- System Overview & Chronology
- Complete Listing of Line-Item Descriptions
- Lexicon of HBVS/Accounting Terms
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