Business Valuation Services
HCG's Business Valuation associates have evolved over the years from a group whose principal practice was accounting and compliance service into a group whose core focus is valuation.
Twenty years ago, traditional asset accounting constituted 80 percent of the market value of a company--today it is only responsible for 25 percent. Why? Primarily because the traditional accounting system overlooks many intangibles and almost all types of intellectual capital.
HCG's Business Valuation associates support the view that traditional accounting practices reflect a business' past, not its present or future. Traditional accounting's worldview was formed during a time when businesses created value through tangible resources, such as buildings, equipment or the transformation of raw materials into intermediate and finished products. In today's knowledge-based economy, companies are much more likely to create value by using intangibles and intellectual capital resources such as proprietary processes, brands, relationships and knowledge. As well as it has served business in the past, and as much as its resistance to fads has served to keep the trust of the investing public, traditional accounting practices are now several decades behind business realities.*
Business Valuation captures (identifies and quantifies) the hidden value in a business enterprise. The true value of a business is not merely its assets minus its liabilities. This simple calculation quantifies accounting value, but falls far short of quantifying the true economic value which takes into consideration both tangibles and intangibles (goodwill, intellectual property, name and reputation, human capital, etc.). For example, from an accounting perspective, human capital is virtually impossible to monetize. Even though it is theoretically possible to value in terms of future cash flow generation (derived by extrapolation of historic trends), this approach would be viewed as extremely speculative based on the current trend toward applying strict accounting standards regarding intangibles. Yet, professional valuation standards mandate such consideration.
Meeting Your Valuation Needs
Simply put, knowing the value of your business is essential for effective tax and exit strategy planning.
Determining and preserving the value of your business, however, is not simple. This requires an experienced professional with a thorough understanding of valuation as defined by the Internal Revenue Code, Federal and State tax law, Treasury regulations and case law. It also requires an ability to identify and quantify the hidden value in a business enterprise.
Let our knowledge, experience and professionalism work for you. We provide a quality professional valuation capable of withstanding IRS scrutiny as well as one that is legally defensible.
As we all know, the best defense is a strong offense!