This is our comprehensive business valuation service. It is fully compliant with the IRS Revenue Ruling 59-60. We recommend this service for situations where the valuation is more likely to be contested. You simply send us the required company information and we do all the rest. The valuation result is based upon at least three widely accepted valuation methodologies. Our Chief Valuation Officer personally reviews the valuation results, and signs the relevant valuation documents.

IRS Revenue Ruling 59-60 Compliant

The Internal Revenue Service Revenue Ruling 59-60 sets out the standards for valuations that are submitted to the IRS for estate and gift tax returns. The basic requirements are that:

1. The valuation analyst must review the recent financial history of the business.
2. Unless there is a very comparable market comparable valuation result available for use, the valuation analyst should use at least two methods to value the business.
3. The valuation analyst should use his/her judgment about how to weight the multiple results to get a final number.

Service Details

Valuation Method:
Discounted Free Cash Flow method using Axiom Valuation's expert system, Private and Public company Market Comparables for Revenue and EBIDTA where available and appropriate for the analysis

Valuation Results:

• Total Fair Market Value
  (includes Control Premium and Liquidity Discount)
• Minority Value
  (Value of Ownership Equity without Control Premium)
• Total Fair Market Value and Total Minority Value Per Share

Information Requirements:

• Stockholder agreements
• Up to five years of business tax returns and financial statements
• Accounts receivable aging for the previous year-end and current year to date
• Accounts payable aging for the previous year-end and current year to date
• Company marketing brochures, price lists, catalogs, and/or company website URL
• Organization chart and management roles and responsibilities (where already prepared)
• List of major customers by sales
• Company business plans, projections of future revenue and earnings (where already prepared)
• Previous business, equipment, or property valuations or offers to purchase

Valuation Interview:
Axiom Valuation staff conducts a preliminary review of the company information and then schedules a phone interview with the client or the client’s designated representative. The valuation interview lasts about 90 minutes and the topics include:

• Review of the company’s history, corporate documents, and most recent five year financial performance.
• Review of company’s operating and non-operating assets
• Determining the appropriate NAICS/SIC code industry designation(s) for the company’s line(s) of business
• Review of economic, regional, and industry factors impacting the company
• Review of how the company sells its products or services, key customers, and competitors
• Review of existing business plan projections, if any, and determining a reasonable projection for revenue and profit growth
• Discussion of company’s long-term competitive advantage
• Review of owner discretionary expenses and possible non-recurring expense or revenue items
• Review of firm-specific risks, including customer concentration, supplier reliance, and key person reliance
• Review of comparable company sales in this industry

The objective of this review is to finalize inputs and key assumptions to use in developing our preliminary valuation results and preparing a draft report.

Draft Valuation Report:
Axiom Valuation e-mails the draft report to the client and/or the client’s designated representative, and then schedules a follow-up phone discussion.

Phone Review:
Discussion of draft results and Q&A session with client and/or the client’s designated representative conducted by a senior Axiom Valuation staff member. Any changes or corrections identified are made in a timely manner to produce the final report.

Business Valuation Report:
The report is 60+ pages long. We provide three hard copy Business Valuation Reports in a customized binders, one unbound hard copy, and an electronic version of the report in an Adobe Acrobat PDF file.

Additional Questions:
Phone support for questions after final report delivery is included in this service.

Updates:
For business where there have been no material changes in markets served or comparable companies since the last Axiom Valuation certified valuation, a certified update service is available at a reduced price. Please contact us for a quote.