The Right Price for Your Business by Morris A. Nunes

Management of Hospitals and Health Services: Strategic Issues and Performance

The Right Price for Your Business
By Morris A. Nunes

2003/07 - Beard Books
1587981912 - Paperback - Reprint - 197 pp.
US$34.95

Here is everything you need to buy or sell a business and not sell yourself short.

Publisher Comments


Category: Banking and Finance

Whether you are buying or selling a business, how do you know what it is worth, especially in a marketplace that's as predictable as the weather? One place to start is to read the comprehensive step-by-step techniques in The Right Price for Your Business. In one complete source it gives you the vast range of information you need to judge what a company is worth-any size company in any type of business. It does it for every step of both the buying and selling process to give you a clear idea of the goals and perspectives of each. Plus, it integrates management accounting statistics, investment analysis, financial analysis, and practical economic techniques into every phase of the deal.

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Morris A. Nunes is an attorney in private practice in Falls Church, Virginia, with over 25 years experience. His practice is concentrated in businesses and associations, real estate, taxation, and financial matters. He holds a B.A. from the University of Pennsylvania and a B.B.S. from the Wharton School, in addition to a law degree from Georgetown University. He serves as an Adjunct Professor at Catholic University's Columbus School of Law and at Georgetown University Law Center. He is also the author of five books on business and legal subjects and numerous articles.

Other Beard Books by Morris A. Nunes:

Balance Sheet Management: Squeezing Extra Profits and Cash from Your Business

ABOUT THE AUTHOR				xix
LIST OF ILLUSTRATIONS				xxi
INTRODUCTION				1
Chapter 1: DATA DEVELOPMENT
First Steps to Realistic Determination				7
	Beholder's View			7
	Two Data Segments			8
	First Impressions			8
	Source Attributes			10
	What Information?			12
	Subjective Data Distillation			13
	The Distillation Tests			16
	Objective Data Distillation			18
		Book Accounting		18
		Cash Flow Accounting		19
		Budgetary Accounting		19
		Management Accounting		19
		Tax Accounting		20
		Operational Accounting		21
		Regulatory Accounting		21
	Avoiding Data Bias			22
	Data Organization			25
	Onward			29
Chapter 2: ANALYTICAL FRAMEWORK
The Essential Decision Tools				31
	From Indifference to Intensity			31
	Economics 101			32
	More About "Sample Company"			35
	Components of Return			36
	Risk and Return			37
	Cost of Capital			39
		Opportunity Cost		40
		Liquidity Preference		41
		Maturity		42
		Variability		42
		Tax Status		42
	Projections			42
		Replication		43
		Functionates		43
		Averaging		45
		Probability		45
		Curve Fitting		46
		Min-Max and Simulation		48
		Gut Projections		50
	Sample Company's Projections			50
	Ready To Go			51
Chapter 3: FINANCIAL FRAMEWORK
Finding the Clinical Baseline Value				53
	Objective			53
	Methods			54
		Asset Values		54
		Stream-of-Income Values		54
		Combination Methods		55
		Marketplace Methods		55
	Asset-Based Methods			58
		Book Value		58
		Adjusted Book Value		58
		Present Net Asset Growth Value		65
		Replacement Value		67
		Startup Value		69
	Other Asset-Based Methods			71
	Stream-of-Income-Based Methods			72
		Payback		73
		Income Ratio and Rate of Return		73
		Discounted Income Value		74
	Combination Methods			75
		Excess Income Plus Assets		76
		Total Present Value		77
	Marketplace Methods			80
		Prior Sales		80
		Comparison Values		81
		Market to Book		82
		Revenue Multiplier		83
	Which Is the Best Method?			85
Chapter 4: VALUE COMPONENTS
Pricing Influences Beyond Financial Statements				87
	Fleshing Out the Framework			87
	Two Component Groups			87
		Internal Components		89
			Personnel	89
			Customers	94
			Support Relationships	94
			Tangible Assets	95
			Intangible Assets	97
			Liabilities	98
			Quality of Earnings	98
			Tax Attributes	101
			Research and Development	101
		External Components		102
			Economy	103
			Gross National Product (GNP)	103
			Inflation	103
			Interest Rates	104
			International	104
			Industry Activity	104
			Other Economic Factors	105
			Technology	105
			Competition	106
			Regulation	107
			Social Tastes and Social Risks	107
			Political Events	107
			Resource Stability	108
			Labor Stability	108
	Components Summary			109
Chapter 5: COMPONENTS ASSESSMENT TO FINAL PRICE
Decision Time				111
	Avoiding Analysis Paralysis			111
	Deal Appreciation			112
	Quantification Choices			112
		Net Asset Values		113
		Profits		113
		Discount Rate: Concept		114
		Discount Rate: Practice		116
		Weighted Risk Grade		119
			Component Weight	119
			Criticisms and Responses	120
		Discount Rate: Decision		122
		Discount Rate: Confirmation		124
	The Price			128
	Decisional Calculations			128
	Special Cases			132
		The "One-Man Show"		132
		The Loss-Ridden Company		133
		The Brand-New Company		133
		Publicly Held Companies		133
		Foreign Companies		134
		Less Than the Whole Company		134
		Spin-offs and Split-ups		135
		Uncommon Stock		135
		The Shell Company		135
	Conclusion			135
Appendix 1: SAMPLE COMPANY FINANCIAL STATEMENTS, OPERATING STATISTICS, AND PROFIT PROJECTIONS				137
Appendix 2: PERSONNEL EVALUATION STATISTICS TEMPLATE				147
Appendix 3: MATHEMATICAL CONVENTIONS				151
Appendix 4: COMPENDIUM OF FORMULAS				153
Appendix 5: PRESENT VALUE AND COMPOUND INTEREST TABLES				157
Appendix 6: FOUR-PLACE COMMON LOGARITHMS				167
INDEX				171

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