Here is the short answer: risk and the required rate of
return are directly related. As risk increases, the required
rate of return increases. As risk decreases, the required
rate of return decreases. Let’s take a closer look at what
that means and how it affects the value of a company.
Be careful not to confuse actual rate of return with
required rate of return. The former reflects
historical financial performance and calculates the company’s
actual return on investment while the latter...
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Interested in
learning more about the
accounting, tax and valuation considerations you should take into
account when issuing stock options?
After reading this e-book, you'll have a better understanding of
these basic valuation concepts:
- Stock option landscape
- Accounting & tax ramifications of issuing stock
options
- Practical considerations when issuing stock options
- The Backsolve Method
Click here to
download our free e-book.
For more information on our Valuation
& Litigation Advisory Services,...
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When Ari Gold,
a character from the HBO critically acclaimed series “Entourage”,
was negotiating the purchase of the McQuewick Agency with Terrence
McQuewick, Ari’s former boss and sworn enemy, Terrence was offering
to sell the Agency to Ari without the consent of Terrence’s other
partners. It was obvious that Terrence didn’t obtain his
partners’ approval given their reaction once Ari took control of
the Agency (they were less than pleased).
The story line in this episode isn’t far from...
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I’m pretty sure my first experience with earnouts came at the
lunch table with my buddies in grade school.
“I bet you I can throw my sandwich wrapper into the trash can from
here.”
“Oh yeah?”
“Yeah. I’ll bet you a dollar.”
“You’re on.”
While transaction earnouts involve many more dollars than my story,
as well as much more complex terms, the concept is generally the
same — an earnout is a payment based on performance. For example, a
deal may include a $20 million cash payment and an earnout...
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This month's issue of Valuation
& Litigation Advisory Insights includes the following
articles:
If you have any questions about any of
these articles, please contact our Valuation & Litigation Advisory Services
Group at 440-449-6800.
If you would like to...
Read More >>
Steps to Take Now That Your Personal Information Has
Been Distributed
Today, many were awakening to learn that the City of Akron’s
internal computer system was hacked by a group of Turkish
radicals. According to Ohio.com, 47,452 entries of personal
information associated with income tax filings including names,
addresses, social security numbers and even credit card information
has been compromised. The hackers have even gone so far as to
post some of this “stolen” personal and private...
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Merging
entities together is nothing new. Companies merge all of the
time. Government offices even merge every so often, with
local governments having been known to share services or annex one
another. What about merging credentialed professionals into
one? That’s a little more unusual.
It’s not very often that you see credentialing bodies
consolidate or merge certifications, but this is just what the
National Association of Certified
Valuators and Analysts (“NACVA”) is doing with two of...
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This month's Valuation & Litigation Advisory Insights
includes the following:
When a Purchaser Involves Both Cash and Stock, Buyer and
Seller Beware
There is risk on both sides of a transaction when a privately-held
company is issuing shares as a component of deal consideration.
There are competing interests that can...
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Many of us have prepared or reviewed financial projections.
Most projections are usually based on a per-unit sales
estimate, long-term contract analysis or some sort of extrapolation
of historical growth trends. Some projections are spot on
every year, but other projections are littered with illogical
conclusions and calculation errors.
While any set of financial projections is dependent upon
numerous assumptions, there are a few critical areas that are more
prone to errors than others.
The...
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National statistics reflect that many employees, at all levels
within a company, can be dishonest. Employers lose approximately 5%
of their gross income due to employee theft.
With the economic hardships many people face today, more and
more good employees are tempted to commit a criminal act and steal
from their employer. Mitigating internal financial
misappropriations begins with strong internal controls, but there
are other steps employers can take to protect the theft of
corporate assets.
Click...
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This month's Special Delivery Includes:
Coping with the New 3.8% Medicare Surtax
Some high-income investors face a “tax increase” this year that...
Read More >>
This month's issue of Valuation
& Litigation Advisory Insights includes the following
articles:
Free E-Book: A Corporate
Executive’s Roadmap to Fraud Prevention
Frank A. Suponcic, CPA, CFE, CFF
National statistics reflect that many employees, at all levels
within a company, can...
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There is risk on both sides of a transaction when a privately
held company is issuing shares as a component of deal
consideration. There are competing interests that can heighten the
incentives for, and the likelihood of, overpayment or
underpayment.
We are all familiar with the phrase “cash is king.” Why is it,
though, that cash is crowned king and not real estate, bonds or
LeBron James?
It all boils down to the fact that everyone can agree to the value
of a dollar bill without dispute — $1 is...
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This month's Special Delivery includes:
Update Your Email Preferences
As business advisors, we want to make sure we are providing our
clients and business contacts with messages and updates relevant to
your individual and/or...
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Business owners and financial managers love to know what their
businesses are worth. One of the most common financial terms
referenced when desiring to know a business’s value is its
multiple.
There are all sort of multiples referenced in discussions or in
the context of industry articles and publications. Some
multiples are based on revenues or sales, while others are based on
some form of earnings, whether it is pre-tax income, seller’s
discretionary earnings, or earnings before interest,...
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This month's issue of Valuation & Litigation Advisory
Insights includes the following articles:
Fair Value and Financial Reporting Valuations: Measuring
the Intangibles
“That quarterback has all the intangibles.” This is a
pretty common phrase that is thrown around by sports reporters
during the weeks and months leading up to...
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Last night, I received a telephone call at home from a
collection agency wanting me to pay a $92 outstanding traffic
ticket from the City of Tampa, FL. I have only been in Tampa
once and did not have a car. As a result I could not have
received that ticket. I’m hoping that this individual just
made up a telephone number and that number just happened to be
mine. But it got me thinking. Why?
This week, the Federal Trade Commission (“FTC”) released a
report which concluded that one out of four...
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This month's issue of Valuation & Litigation Advisory
Insights includes the following articles:
If you have any questions about any of these articles, please
contact our Valuation
& Litigation Advisory Services Group at 440-449-6800.
Or, would you like to contribute content to an upcoming issue of
Valuation & Litigation Advisory Insights? If so,...
Read More >>
January 17, 2013 – CLEVELAND – Skoda Minotti, a
CPA business and financial advisory firm, is proud to announce that
Joseph Yusz, CPA and manager of business
valuation and litigation
advisory services, recently earned the Certified Valuation
Analysts (CVA) designation, which allows him to perform business
valuations as a service to both the consulting community and users
of services.
The National Association of Certified Valuators and
Analysts (NACVA)
The National Association of Certified...
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Interested in
learning more about the 
When Ari Gold,
a character from the HBO critically acclaimed series “Entourage”,
was negotiating the purchase of the McQuewick Agency with Terrence
McQuewick, Ari’s former boss and sworn enemy, Terrence was offering
to sell the Agency to Ari without the consent of Terrence’s other
partners. It was obvious that Terrence didn’t obtain his
partners’ approval given their reaction once Ari took control of
the Agency (they were less than pleased). 
Merging
entities together is nothing new. Companies merge all of the
time. Government offices even merge every so often, with
local governments having been known to share services or annex one
another. What about merging credentialed professionals into
one? That’s a little more unusual. 
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