I’m reminded of an inquiry posed at a recent seminar I spoke at where I was asked if I had experience with non-profits where I replied, “alas, yes.  Unfortunately, so many of these businesses were, unfortunately, “non-profit” - but not by choice!”

In today’s highly competitive business environment, many companies have problems maintaining profitability. Nevertheless, they often need valuations for obtaining a loan, preparing for a buyout or other reasons. Valuing a company experiencing financial difficulties can, however, be tricky. If I, or one of my business appraiser colleagues, choose the wrong method and assumptions, the value may appear to belie the company’s financial woes. In addition, an owner of a troubled company often tries to up the value by citing the circumstances that led to the problems and suggesting potential remedies. Even if some of these ideas are valid, they are typically merely hypothetical, and valuators cannot necessarily take them into account when attempting to reach an accurate value. Let’s look at a few points to consider. Click on the attached file to continue reading.