Glossary

The act or process of providing information, recommendations and/or conclusions on diversified situations, processes or problems in businesses, other than estimating value. Also (as a noun), the result of the act or process of analysis.

The act or process of estimating value. Also, the result of the process of estimating value. The words “valuing” (verb) and “valuation” (noun) are synonymous with “appraisal.”

The total amount for which a business or an ownership interest is offered for sale. The asking price could be inclusive or exclusive of inventory or other assets.

Asset Sale – This term has two definitions. The proper definition depends on its usage: A. The means by which a business owner transfers ownership of tangible and intangible assets, and possibly some liabilities, to another owner without transferring the ownership entity. B. The sale of a business enterprise that… Read More »Asset Sale

Balance Sheet – A financial statement that is one of the three important financial statements used for reporting a company’s financial performance, with the other two key statements being the income statement and the statement of cash flows. The balance sheet is a statement of the financial status of the business… Read More »Balance Sheet

Any obstacle that makes it difficult for a business to enter and succeed at generating revenues in an existing marketplace. Barriers to entry can include government regulations, the need for licenses, and having to compete with other larger companies as a small business start-up. Types of Barriers to Entry There… Read More »Barrier to entry

Any level of income, cash flow, or earnings generated by an asset, group of assets, or business enterprise. When the term is used, it should be supplemented by a definition of exactly what it means in the given valuation context.

That portion of a “claimed” value or requested price that cannot be supported, or generally shown to exist, through the application of established valuation methodology. Alternatively, it is that excess value, above the business’ financial value, paid by a strategic buyer based on the buyer’s perceived future value of that… Read More »Blue-Sky

Book Value of a company is the difference between a company’s total assets and liabilities. Book Value of an asset is the value at which the asset is carried on a balance sheet, calculated by subtracting its accumulated depreciation from the the original cost of the asset.

A professional intermediary dedicated to serving clients and customers who desire to sell or acquire businesses. A business broker is committed to providing professional services in a knowledgeable, ethical and timely fashion. Typically, a business broker provides information and business advice to sellers and buyers, maintains communications between the parties… Read More »Business Broker