Monday, February 4, 2013

Do You Know the Value of Your Firm?

Here are 10 reasons why you should know the value of your stock: 

1. It lets you keep "score." 

2. Value allows you to give gifts of stock for tax-saving reasons.

3. It puts proper valuations on your buy/sell agreements.

4. It creates a determination for the amount of your inheritance tax.

5. It can be used for applying for loans.

6. It can let you know your true financial position in order to avoid misjudgments in personal business situations relative to bringing in people to the partnership or letting them out.

7. It helps you deal with untimely deaths, establishing the valuation from the point of view of heirs.

8. It helps you if you are given an offer to purchase. You should know the value so you can decide whether or not to sell.

9. It allows you to know whether you have enough assets to expand via a merger or an acquisition, giving you enough time to value your company and pledge those assets.

10. It allows you to tell your employees that you are a growing company. Whether you are planning your firm's imminent leadership transition through a solid M&A strategy or preparing for a positive internal ownership changeover, knowing the value of your firm is imperative.

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