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The Market Approach to Valuing Businesses
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  • Wiley

More About This Title The Market Approach to Valuing Businesses

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SHANNON P. PRATT is a founder and managing director of Willamette Management Associates, the managing owner of Business Valuation Resources, LLC, and a member of the board of directors of Paulson Capital Corp. He holds a doctorate in business administration from Indiana University. Dr. Pratt is author of Business Valuation Body of Knowledge: Exam Review and Professional Reference (Wiley); Cost of Capital: Estimation and Applications (Wiley); and The Lawyers Business Valuation Handbook. He is coauthor of Valuing a Business: The Analysis and Appraisal of Closely Held Companies, Fourth Edition; Valuing Small Businesses and Professional Practices, Third Edition; and Guide to Business Valuations, Tenth Edition.

Contributors:
STACY ISON ("The Market Approach in the Courts," Chapter 19) is managing editor of Shannon Pratt’s Business Valuation Update™. DOUG TWITCHELL ("Comparative Financial Analysis," Chapter 8; "Compiling Useful Market Value Tables," Chapter 9) and CHAD PHILLIPS (sample cases, Chapters 13 and 14) are comanagers of Pratt’s Stats™. ALINA NICULITA, an intern at Business Valuation Resources, LLC, prepared Appendices A and B. Z. CHRISTOPHER MERCER ("The Quantitative Marketability Discount Model," Appendix D) is CEO of the Mercer Capital business appraisal firm. PAUL HEIDT, a financial analyst at Business Valuation Resources, LLC, compiled Appendix E.

  • English

English

List of Exhibits.

Foreword.

Preface.

Acknowledgments.

Notation System Used in This Book.

Introduction.

Part I. Defining Market Multiples and Market Approach Methods.

1. Defining Market Value Multiples.

2. The Guideline Public Company Method.

3. The Guideline Transaction (Merged and Acquired Company) Method.

4. Other Market Methods.

Part II. Finding and Analyzing Comparative Market Transaction Data.

5. Finding Public Company Market Transaction Data.

6. Finding Merger and Acquisition Market Data.

7. Adjusting Financial Statements.

8. Comparative Financial Analysis.

Part III. Compiling Market Value Tables and Reaching a Value Conclusion.

9. Compiling Useful Market Value Tables.

10. Selecting,Weighting, and Adjusting Market Value Multiples.

11. Control Premiums and Minority Discounts.

12. Discounts for Lack of Marketability.

Part IV. Sample Market Approach Cases.

13. Small-size Service Company Sample Case: Sub Shop.

14. Medium-size Service Company Sample Case—Software Developer.

Part V. Important Aspects of Using the Market Approach.

15. Reconciling Market Approach Values with Income and Asset Approach Values.

16. Does Size Matter? Evidence from Empirical Data.

17. Common Errors in Implementing the Market Approach.

18. The Dismal Track Record of U.S. Market Acquisitions.

19. The Market Approach in the Courts.

Appendixes.

Appendix A: Bibliography.

Appendix B: Data Resources.

Appendix C: International Glossary of Business Valuation Terms.

Appendix D: The Quantitative Marketability Discount Model.

Appendix E: Pratt’s Stats Data Contributors.

Index.

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