Putting a price tag
on synergy
In
successful business combinations, the value of the combined entity often
exceeds the sum of the parts operating independently. This incremental value
commonly is referred to as “synergy.” This article explains how different types
of possible business combinations might generate potential synergies. It also
discusses how strategic value differs from synergy value and notes the role of
a professional appraiser in ensuring all factors are carefully considered.
Cash is king when
evaluating financial performance
Experienced
business owners know that profits mean nothing if there isn’t enough cash left
over to pay their salaries and dividends. This article shows how valuators can
help management prepare cash flow budgets, evaluate strategic investment
decisions, devise reorganization strategies, and brainstorm profit and
efficiency enhancement alternatives. It also suggests some options for business
owners to help them survive a cash crunch.
Trade secrets: An
economic damages case
This article discusses a recent circuit
court case, Carbo Ceramics Inc. v. Keefe, which provides a framework for
developing economic damage theories in trade secret misappropriation cases. The
case suggests the reasonable royalty method is the preferred approach when
trade secret misappropriation is imminent but no actual damages have occurred.
It also underscores the importance of collaboration between attorneys and
valuators to ensure experts choose the appropriate methodology based on
relevant case law.
Carbo Ceramics, Inc. v. Keefe (5th
Circuit Federal No. 04-20873, January 26, 2006).
Valuation reports
It’s
not just what you say but also how you say it
This
brief article notes the importance of selecting the appropriate reporting
format to enable the valuator to get the message across to the report’s
intended audience. The article describes several kinds of reports, including
both oral and written. The article points out that professional standards
require valuators to disclose engagement scope, along with any limitations, in
their written reports.
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