A hotly contested divorce is underway. One spouse claims that the family business is worth nothing; in fact, they insist they are struggling to keep the doors open. And yet, their spouse claims the business is worth much more and should be considered equal to the primary residence, the lake house, and one of the family cars combined.
With both spouses disagreeing on the value of the business, how is a judge expected to make a “just and right” division of assets? This is where a business valuation expert can help.
What is a Business Valuation Expert?
A business valuation expert is a trained professional who can determine a company’s worth. Business owners often hire these experts when selling a business, changing ownership, or planning an estate. Often, a divorce attorney will bring a business valuation expert into the conversation when couples are going through a divorce.
A skilled business valuation expert aims to gather as much relevant information as possible about the business to gain a true financial picture. This can include bank statements, tax returns, profit and loss statements, payroll records, spreadsheets with key financial data, and other necessary records. From there, the business valuation expert will use industry-specific information to determine the true value of the business. This can include the following methods:
Market Approach
This method looks at the selling prices of similar businesses to estimate the company’s current value, much like a home’s value is appraised.
Income Approach
This method focuses on your company’s cash flow and predicts its future financial value. It calculates the company’s present worth based on expected earnings, taking into account economic conditions and industry trends.
Asset Approach
This method adds up the value of real estate, equipment, inventory, and supplies to determine the total value of the business. This total dollar amount becomes part of the company’s overall value to potential buyers, shareholders, or a judge dividing assets in a divorce case.
The business valuation expert’s findings are vital to dividing assets. By giving the judge a clear view of the company’s true value. The expert helps ensure that the financial decisions during the divorce are fair for both sides.
Please call Christman | Daniell for your legal needs today!
Looking for family law services in Texas? Christman | Daniell is your premier choice. With years of experience and a deep understanding of the legal landscape, our skilled team is dedicated to helping families navigate complex legal matters. Whether it’s divorce, child custody, or adoption, trust Christman | Daniell to provide compassionate and effective representation.
Please consult an attorney for advice about your situation. The material on this website and in this or any blog article we publish are for informational purposes only. They do not constitute legal advice. The attorneys at Christman | Daniell believe in tailoring legal advice and solutions to your circumstances.
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