Value within the family – look at me

December 6, 2017

This is not a reference to Kath and Kim, more of a story about the apparent tsunami of business owners looking for the exit, following on from my last post Losing your hard earned. I had a recent client that was considering succeeding his beloved business to the family or selling to an outsider and...


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Business valuation “tsunami”

November 7, 2017

A headline in the papers this morning read “Who to put your hard-earned on in the Cup”. Brilliant, the day had come for my annual bet / Melbourne Cup cramming session / pretending to know anything about how to read the form guide. 23 horses = 4% chance of winning (all horses are equal). Easily...


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Business valuations – part 5

October 2, 2017

I have already discussed the shortcomings of using EBITDA in business valuation, despite its prevalence in financial markets and company announcements. My preference is not to ignore depreciation. Depreciation is often considered a proxy for capital expenditure. You know, the money that needs to be spent to grow your business or replenish capital assets. The...


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My Thermomix has no value – Higgins & Thermomix [2017]

September 11, 2017

Higgins & Thermomix [2017] WADC 101 This case is primarily focused on whether Thermomix Australia engaged in misleading or deceptive conduct, but does provide insight into the judge’s application of business valuation issues for a damages claim by the plaintiff. Mrs Higgins operated as a Thermomix group leader, overseeing a defined geographic area and a...


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Business valuations – part 4

September 4, 2017

I spent yesterday afternoon with one of my boys making a gadget – a toy combustion engine given as a birthday present. I am not very handy with tools, gadgets and generally making stuff. Suffice to say the afternoon ended with an unfinished engine, a few band-aids on my fingers and some swearing under my...


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“Woefully inadequate” evidence – Yavuz & Yavuz

August 15, 2017

Yavuz & Yavuz [2017] FamCAFC 74 (April 2016) A woman, her husband and his brother went to court… This family law matter involved Mrs Yavuz (the wife), Mr Yavuz (the husband) and Dr Yavuz (the husband’s brother). The husband and his brother were partners in a number of businesses and investment properties, equally sharing in the...


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Business valuations – part 3

July 24, 2017

In the last post, I talked about the selection of the “multiple” in the relatively simply formula for valuing a privately owned business: Business value = Profit x Multiple The multiple broadly represents growth and risk. So what are the risk factors and how do they impact the selection of the multiple? Pretend you are...


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Business valuations – part 2

June 20, 2017

In the last post, I talked about the selection of “profit” in the relatively simply formula for valuing a privately owned business: Business value = Profit x Multiple So what is the multiple and where does it come from? The multiple represents a benchmark or comparison to another business that is similar. The multiple is...


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Business valuations – part 1

June 20, 2017

To paraphrase Tom Hanks from A League of Their Own, if business valuations were easy, everyone would do it. I would also need to find another job. Why is it that there are more than 3,000 accountants in Victoria and only 25 CA BV (Business Valuation) Specialists? Certainly the formula for valuing a privately owned...


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Shareholder discounts – Cantwell & Cantwell [2017]

April 17, 2017

Cantwell & Cantwell [2017] FamCA 117 (March 2017) This family law matter involved a shopping list of property interests held via various trusts, companies and partnerships. Within the property interests were two businesses, called Suburb B and Suburb C. The Cantwell’s (husband and wife) directly and indirectly owned: Suburb B – 50% interest (the husband)...


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