|
1. ASSESSMENT
GUIDELINES
Generally a business needs
to be established over 2 years to achieve full value. 9 out of 10 new
businesses fail within the first 2 years.
Asset Values
Plant, Machinery,
Fixture, Fittings & Vehicles:
There
are a number of values
a.
Depreciated Value in the Balance Sheet
b.
New / Replacement Value
c. Auction Value
d.
Business Value
2. USE
BUSINESS VALUE
A “guesstimate” somewhere
between the new / replacement on the high side and the depreciated /
auction value on the low side. ie. What it’s worth to the business.
Lease/H/P on Assets:
(If any)
a. The
difference between the Market Value and the settlement amount, would be
added to the
Asset Value.
b. A
negative value would not be deducted, just disregarded
Stock:
is the cost value excluding VAT
Debtors:
The debtors book less
creditors and unrecoverable amounts
Businesses with little or
no debtors insert zero
NB:- Best advice, let
seller rather collect his debtors and settle his creditors.
Other:
Would only apply to some
businesses with unusual or Intellectual value
Franchises might add their
franchise fee back.
Example:
A Franchise Estate Agency
has a large part of its purchase price based on
Intellectual Property,
this cost can be added back.
Annual Income & Net Profit
Owner/Member/Director
Salary: Actual Salaries/Emoluments paid
Insurance/Annuities:
Total value of payments
Medical Aid:
Annual premiums plus additional payments
Motor Vehicle:
Value of personal use ie. Repayments, petrol, repairs maintenance
Other:
Any other non-business expense the owners may benefit from
Total Perks plus Net
Profit: The total of all salary and perks derived out of the
business
Click here for Valuation Guides
Complete assessment form.
|
