Business Valuation

A business valuation is a formal, credentialed analysis that determines the fair market value of a business or an ownership interest in a business. You may need a business valuation for a wide range of purposes, including planning to buy or sell a business, establishing pricing in a buy-sell agreement, estate and gift tax planning, transferring ownership to family members or key employees, resolving shareholder or partner disputes, obtaining SBA or bank financing, setting up or managing an ESOP, and strategic planning. Even if no specific event is on the horizon, understanding the value of your business is foundational to making informed decisions about its future.

Yeo & Yeo’s valuation professionals apply recognized, standards-based methodologies that are appropriate to the specific purpose and circumstances of each engagement. The three primary approaches used in business valuation are the income approach (which focuses on the business’s ability to generate future cash flow or earnings), the market approach (which compares the business to similar companies that have been sold or are publicly traded), and the asset-based approach (which focuses on the fair market value of the business’s underlying assets and liabilities). In most engagements, multiple approaches are considered and the most applicable methodology or combination of methods is used to arrive at a well-supported, defensible conclusion.

The timeline for a business valuation depends on the complexity of the business, the purpose of the valuation, and the availability of financial information and documentation. Most business valuations are completed within four to eight weeks from the time all required information is received. For time-sensitive matters such as transactions with firm deadlines or active litigation, Yeo & Yeo works with clients to establish a timeline that meets their needs. Our team communicates clearly throughout the process so you always know where things stand.

A comprehensive business valuation typically requires several years of historical financial statements (generally three to five years), recent interim financial statements, federal tax returns, a description of the business and its operations, information about ownership structure and any existing agreements, details on key customers, suppliers, and contracts, and information about the industry and competitive landscape. Yeo & Yeo provides clients with a detailed document request list at the start of the engagement and works with you to gather and organize the information needed efficiently and with minimal disruption to your operations.

Yes. Yeo & Yeo’s valuation professionals are experienced in litigation support contexts and can serve as expert witnesses in legal proceedings involving shareholder disputes, business divorces, commercial litigation, divorce proceedings, and other matters where business value is in dispute. Our professionals provide objective, credible analysis and clear testimony that helps attorneys and courts understand complex financial issues. All valuations prepared for litigation purposes are thoroughly documented and prepared to withstand scrutiny during cross-examination and legal review.

The purpose of a business valuation significantly affects the standard of value applied, the methodologies used, and the way the results are reported and documented. For example, an estate and gift tax valuation must follow IRS requirements and may involve applying discounts for lack of control or lack of marketability that are not applicable in a transaction context. A litigation valuation may need to meet specific evidentiary standards and be prepared for scrutiny by opposing professionals. An M&A valuation focuses on the value a specific buyer would realize, which may differ from fair market value. Yeo & Yeo’s professionals understand these distinctions and tailor each valuation to the specific purpose, ensuring it delivers the accuracy, compliance, and defensibility the situation requires.