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Total IBA Data Base SIC Code 1711
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| Total IBA Data Base SIC Code 1711 Amount Gross $000's Discretionary Earnings $000's Sales Price $000's Sale Price to Gross Sales Sales Price to S.D.E. Median 494 $ 86 $ 150 $ 0.27 Mean 139 $ 286 $ 0.31 Standard Deviation 154 $ 332 $ 0.15 Coefficient of Variation 1.11 1.16 0.48 High 6,500 $ 575 $ 1,200 $ 0.58 Low 28 $ 5 $ 0.07 Number of Data Observations 13 18 18 13 Page 92 of 141 Table 25 IBA Comparable Transaction Statistics ‐ Sale Price to Gross Sales As an above‐average performer, it could be expected that the fair market value of such a company would be higher than the collective average of the market. Therefore, the valuator used the Top 25% results of the above analysis to determine what valuation multiples would be used to develop a basis for the fair market value of an above‐average performer. As indicated in the above table the mean values for the sale price to gross sales and the sale price to discretionary earnings are 0.55 and 3.13, respectively. Although there has been a large amount of data discussed in the previous pages it is important to recognize that all of the results are reasonably statistically valid. This is based on a variety of analyses conducted by Raymond C. Miles (founder and former executive director of the IBA) on how to use the IBA database. Specifically, Mr. Miles states that, if there are tenor more guideline transactions, then the average of the guideline transactions can be assumed to be a reasonably accurate approximation of the average of the market Looking at the data and associated analyses provides a strong base from which to make an informed decision about the valuation multiples used in applying the Direct Market Data Method. The summary of valuation multiples derived from the Direct Market Data Method are shown in the table below 15 Miles, Raymond C. 2005. Technical studies of the IBA transaction database. Plantation, FL The Institute of Business Appraisers. Part VIII. Download 0.84 Mb. Share with your friends:
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