Category Archive: Appraisal/Valuation

Jan 24

From Hoops to Riches?

Forbes recently released its annual business valuations of National Basketball Association teams, concluding that most teams became much more valuable since last year (average annual growth of roughly 24%). At $1.35 billion, the LA Lakers for example, are reportedly worth 35% more today than they were a year ago. This year’s growth among all 30 …

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Permanent link to this article: http://betweenthenumbers.net/2014/01/from-hoops-to-riches/

Dec 19

Update your buy-sell agreement as part of your end-of-year duties

Buy-sell agreements are an important business continuity tool that can assist a business in difficult transition times. Usually, the buy-sell agreement either contains a formula, or requires an annual determination of the price to be employed. All too frequently, the business owners do not revisit the formula to ensure that it remains sensible in light …

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Permanent link to this article: http://betweenthenumbers.net/2013/12/update-your-buy-sell-agreement-as-part-of-your-end-of-year-duties/

Dec 02

Goodwill accounting simplified for private businesses

Last week, the Financial Accounting Standards Board (FASB) approved two exceptions in Generally Accepted Accounting Principles (GAAP) for private companies. Proponents of simplified accounting rules have suggested that private companies be exempted from certain of the more complicated and costly rules. In making these two exceptions, the FASB approved the concept that private companies can …

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Permanent link to this article: http://betweenthenumbers.net/2013/12/goodwill-accounting-simplified-for-private-businesses/

Nov 18

Most S-Corporations should pay greater attention to shareholder/employee compensation

The IRS continues to pursue S-Corporations that do not pay employment/payroll taxes on what the IRS considers to be reasonable compensation. Following other cases on this subject, in Sean Mcalary Ltd, Inc., vs. Commissioner Of Internal Revenue, T.C. Summary Opinion 2013-62 (August 12, 2013), the Tax Court generally ruled in favor of the IRS. The …

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Permanent link to this article: http://betweenthenumbers.net/2013/11/most-s-corporations-should-pay-greater-attention-to-shareholderemployee-compensation/

Nov 16

What Buyers Don’t Want

When you own your home, most people have a never ending to-do list of home renovations they would like to accomplish.  Home improvements can be expensive.  For most upgrades, you do not get a dollar-for-dollar increase in the value of your home.  However, most people still choose to carry out the renovation for personal enjoyment. …

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Permanent link to this article: http://betweenthenumbers.net/2013/11/what-buyers-dont-want/

Nov 05

1 inch is NOT worth $773 million in revenue

Earlier this year, an MSN Money article about Southwest suggested that by reducing legroom one inch at every seat on every aircraft Southwest flies, the airline will generate approximately $773 million more in top-line revenue. Apparently, reducing each aircraft’s seat pitch, otherwise called legroom, by one inch allows Southwest to install an additional aisle of seats, …

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Permanent link to this article: http://betweenthenumbers.net/2013/11/1-inch-is-not-worth-773-million-in-revenue/

Sep 06

Cash is King For Home Purchases

RealtyTrac, a leading source for comprehensive housing data, recently released its July 2013 U.S. Residential & Foreclosure Sales Report.  One interesting piece of information contained in the report was the statistic for all-cash purchases: “All-cash purchases nationwide accounted for 40 percent of all sales of residential property in July, up from 35 percent of all …

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Permanent link to this article: http://betweenthenumbers.net/2013/09/cash-is-king-for-home-purchases/

Jun 05

“Shark Tank” Doesn’t Get Venture Capital Valuation Right

ABC’s popular TV show, “Shark Tank,” shows negotiations between entrepreneurs and five Venture Capital (VC) investors (“the Sharks”). Before describing their company, business owners typically make a request in the following form: X thousands of dollars in exchange of Y percent ownership in the company. For example, in a recent episode, the two owners of …

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Permanent link to this article: http://betweenthenumbers.net/2013/06/shark-tank-doesnt-get-venture-capital-valuation-right/

May 01

Re-writing Economic History with a Substantive Change to the GDP formula

The Bureau of Economic Analysis’ (BEA) report of Gross Domestic Product (“GDP”) is one of the most commonly used indicators of economic health.  It measures the total value of all finished goods and services produced in the U.S. within a specified period (normally a year). In July that number is guaranteed to go up, yet …

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Permanent link to this article: http://betweenthenumbers.net/2013/05/re-writing-economic-history-with-a-substantive-change-to-the-gdp-formula/

Apr 18

Venture Capital Funding Declines in Southern California

The Los Angeles Times reported that venture capital funding has declined considerably in Southern California.  The article sourced data compiled from Dow Jones VentureSource, which provided the following statistics: Southern California companies raised $507.6 million from venture capital investors for Q1 2013, a 42% decline from Q1 2012 The amount raised in Q1 2013 was …

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Permanent link to this article: http://betweenthenumbers.net/2013/04/venture-capital-funding-declines-in-southern-california/

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