Expert appraisers realize that using the best business valuation resources provide their clients with the most accurate analysis. These tools assist the appraiser in analyzing the financials of the company.
Asset Based Approach
The most useful business valuation resource that can assist an appraiser with the asset approach is a machinery and equipment appraisal. Many business appraisers rely on book values or owner estimates of equipment values. This often leads to distorted results. An equipment appraisal by a certified equipment appraiser can provide useful information for the valuation such as separating the tangible versus intangible assets and provide the driving approach to value in cases where there are businesses that have a lot of assets with minimal income.
Market and Income Approaches
The most useful business valuation resources for the market approach include databases of business transactions. Databases for private companies such as Pratt's Stats, BIZCOMPS, and the IBA Database provide the appraiser with previous transaction data. Public company transaction information is available through business valuation resources such as Mergerstat Review. Control Premium and Minority Discount data is available through Mergerstat and Lack of Marketability Discounts available through Restricted Stock Studies. BizMiner, IBIS World, and First Research Industry & Geography Reports also are useful business valuation resources. Duff & Phelps Risk Premium Calculator, RMA Annual Statement Studies, and the SBBI Annual Yearbook are also tools for assisting in company risk and cost of capital calculations and industry benchmarks.