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What factors go into valuing a business?

| Nov 25, 2020 | High Asset Divorce |

Business valuation is an incredibly valuable thing for a variety of situations. If you are divorcing, you will need to value your business in order to handle the property division aspect of resolving your marriage.

Business News Daily explains that while it is hard to put a price tag on a business due to the many details that make up its value, you can come to an estimated worth by looking at a few important factors.

Income

You will, of course, need to consider the financial state of your business. To do this, you will begin by considering your profits, along with the revenue stream. You will need to determine what type of profit your business is turning, which may include averaging if you have had some ups and downs over the years.

Debts

The second part of y our finances is the money you owe. You will need to have a detailed list of debts and other liabilities. You want to know the amount owed, the current value of any assets with liens and information about the lien holders.

Assets

Your business assets can help add to the overall value. You want to look at tangible assets, which are those physical items you own and use to operate your business. Examples of tangible assets include your inventory, tools and equipment. It may also include property if you own any that use specifically for business purposes.

You must also consider intangible assets. These are things that are a bit harder to put a price tag on because they hold value in what they bring to your business. Examples of this include intellectual property and brand recognition.