Valuation of the Common Stock of: «Cell│[1]ReportWriter!B3│0││Peachtree Plumbing, Inc»
Download 435.27 Kb.
|
IntroductionSpecificsWe have performed a valuation engagement, as that term is defined in the Statement on Standards for Valuation Services (SSVS) of the American Institute of Certified Public Accountants, of «Cell│[1]ReportWriter!B3│0││Peachtree Plumbing, Inc». This summary report will provide sufficient information to permit the intended users to understand the data, reasoning, and analyses underlying the valuation analyst’s conclusion of value. «Cell│[1]ReportWriter!B7│0││Viking Valuations, llc» has been retained by «Cell│[1]ReportWriter!B10│0││Peachtree Plumbing, Inc» to estimate the fair market value of «Cell│[1]ReportWriter!B3│0││Peachtree Plumbing, Inc». «Cell│[1]ReportWriter!B3│0││Peachtree Plumbing, Inc» is a «Cell│[1]ReportWriter!B28│0││corporation» located at «Cell│[1]ReportWriter!B4│0││5529 Red Bluff Blvd» in «Cell│[1]ReportWriter!B33│0││Georgia». Furthermore, an interest of «Cell│[1]ReportWriter!B23│0││36%» is being valued as of «Cell│[1]ReportWriter!B5│0│mmmm d, YYYY│June 30, 2006». The appraisal will be used by «Cell│[1]ReportWriter!B10│0││Peachtree Plumbing, Inc» for the sole purpose of the settlement of the estate. The distribution of this report is restricted to the «Cell│[1]ReportWriter!B10│0││Peachtree Plumbing, Inc», legal and tax professionals advising «Cell│[1]ReportWriter!B10│0││Peachtree Plumbing, Inc» and any regulatory agencies whereby reporting is required. Any other use of this report is unauthorized and the information included in the report should not be relied upon.
Standard of ValueFor estate reasons and in accordance to pertaining statues the most appropriate standard of value choosen for this report is the “fair market value”: Revenue Ruling 59-60 defines fair market value as: The amount at which property would change hands between a willing seller and a willing buyer when neither is under compulsion and when both have reasonable knowledge of the relevant facts. In addition, the hypothetical seller and the hypothetical buyer must be in a pool that has the ability to exercise the right. Premise of ValueThis report is prepared using the premise that the subject company is a going concern. This means that it is presumed that in the future the assemblage of assets, resources and income producing items will continue in use to produce income and cash flow. The subject company is a going concern business enterprise. Control CharacteristicsThe business interest valued in this report was a minority interest (36%) owned by Shirley Jones who was the wife of Mike Jones. Because Shirley was the wife she probably had more control over capital structure, payroll and other aspects than if another person owned her interest. If her interest was owned by someone outside the immediate family there would be very limited control characteristics, however a 36% interest (over 1/3 of company) in a company does have greater control characteristics than someone who owns less than a quarter of the company. Someone who owns over 1/3 of a company is going to want to play a big role in the direction of the company including the capital structure. It would be wise for the controlling interest holder to work with the owner of this minority interest, therefore creating some control out of the politics of how big of stake 36% interest is despite it being a minority interest. See section “application of minority interest discount” under the “Estimated of Value” chapter for further details. Marketability CharacteristicsThe marketability characteristics of the subject interest are non-liquid and had very little marketability characteristics. Some of the marketable characteristics would include good management and a 17 year track record. What really limited the marketability of the company is a no dividend policy now or in the future, transfer restrictions (Right of first refusal), not a public company, and the actual transference of good-will that goes with Mike Jones reputation and associations. See section “application of lack of marketability discount” under the “Estimate of Value” chapter for further detail. Sources of Information The primary sources of information were research on the economy, industry and company, analysis of financial statement and interviews with key people. Please see Appendix D for a complete listing.
|