BizEquity Valuation for Apex Manufacturing

29 Pages·2015·1.58 MB·English

Business Valuation Report
June 26, 2021
Apex Manufacturing
BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website.
The estimates and data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has
not audited or attempted to confirm this information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is
the intellectual property of BizEquity and the information provided herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this
report and the information provided herein is also subject to the online terms of use and privacy policy of BizEquity.
Contents
About Your Valuation Report 2
About Business Valuation 3
BizEquity Methodology 5
Your Valuation 6
Financial Summary 7
Key Performance Indicator Overview 9
KPI Details 12
Value Map 25
About BizEquity 26
Next Steps 27
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BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
About Your Valuation Report
This dynamically driven and customized report was Key Performance Indicators
generated to provide the business owner, and entrepreneur
or his or her advisor with general estimates of fair market The metrics (cid:40)no(cid:52)n as (cid:14)ey (cid:19)erformance (cid:12)ndicators (cid:539)(cid:14)(cid:19)(cid:12)s(cid:540)
value and liquidation value under relevant transaction (cid:52)ere calculated based on the analysis of company(cid:530)specific
conditions assumed for the profiled business at a fair price data (cid:52)hich you input to various industry(cid:530)specific averages
and in real-time. The results presented will provide the linked to millions of other businesses. These (cid:14)(cid:19)(cid:12)s are useful
reader (cid:52)ith estimates (cid:52)hich re(cid:413)ect both the (cid:522)sale of assets(cid:523) measures of the overall financial and operational health
and (cid:522)the sale of equity(cid:523) (cid:539)on a going concern basis(cid:540) as (cid:52)ell as and growth of your business and they should be checked
estimates (cid:52)hich re(cid:413)ect the (cid:522)liquidation value(cid:523) and the so(cid:530) regularly in order to identify meaningful trends or (cid:522)red
called (cid:522)enterprise value(cid:523) of the sub(cid:39)ect company. (cid:9)or more (cid:413)ags(cid:523) (cid:52)hich require corrective action. These same
specific information about business valuation, please see measures are commonly utilized by business coaches,
our About Business Valuation pages. financial professionals and potential business acquirers in a
variety of real world settings.
In analyzing your business, we have generated four
distinct and useful estimates of value in addition to as Throughout this valuation, the following color system is
many as 30 performance related metrics: used to denote business performance:
Asset Equity Enterprise Liquidation
Meeting
Value Value Value Value Outperforming Underperforming
Industry
Industry in Industry
Average
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BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
About Business Valuation
(cid:12)n understanding and interpreting the (cid:522)value(cid:523) of a business, (cid:26)hen valuing the entire company (cid:539)(cid:470)(cid:469)(cid:469)(cid:674) control interest(cid:540),
it is important to recognize that there are many different it is necessary to distinguish bet(cid:52)een the value of (cid:522)assets(cid:523)
(cid:522)types(cid:523) and (cid:522)levels(cid:523) of value. The most common scenario (cid:539)asset deal(cid:540) and the value of (cid:522)equity(cid:523) (cid:539)stoc(cid:40) deal(cid:540). (cid:12)n
involves the estimation of (cid:522)fair mar(cid:40)et value on a going practice, owner-operated businesses are either sold on an
concern basis(cid:523) for the entire company, e.g. a (cid:470)(cid:469)(cid:469)(cid:674) interest (cid:522)asset sale basis(cid:523) or on an (cid:522)equity sale basis(cid:523) (cid:52)ith the
in the subject equity or assets/enterprise. purchase agreement re(cid:413)ecting the unique aspects of each
scenario.
A variety of factors will determine the chosen mode of sale,
with buyer and seller negotiating price and an array of other
Fair Market Value
(cid:522)terms and conditions(cid:523) including the type of sale.
(International Glossary of Business Valuation Terms)
The price, expressed in terms of cash
equivalents, at which property would change The majority of small private
hands between a hypothetical willing and
firms are sold as asset sales
able buyer and a hypothetical willing and able
seller, acting at arms length in an open and while the majority of middle-
unrestricted market, when neither is under
market transactions involve
compulsion to buy or sell and when both have
reasonable knowledge of the relevant facts. the sale of equity.
Going Concern
An ongoing operating business enterprise. The (cid:522)asset sale(cid:523) value (cid:52)ill al(cid:52)ays differ from the (cid:522)stoc(cid:40) sale(cid:523)
value due to the specific group of assets and liabilities that
Liquidation Value are included or excluded in each format.
The net amount that would be realized if the
In determining which estimations of value are of most
business is terminated and the assets are sold
relevance to the business owner, the reason behind the
piecemeal. (cid:15)iquidation can be either (cid:522)orderly(cid:523)
valuation will typically address this question. Business
or (cid:522)forced.(cid:523)
brokers hired to assist buyers and owners most commonly
value businesses under the (cid:522)asset sale(cid:523) scenario through
multiples of discretionary earnings while valuations for
divorce or estate ta(cid:53)es (cid:52)ill be based primarily on the (cid:522)equity
sale(cid:523) scenario.
Page 3 of 27
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BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
About Business Valuation
(continued)
The general differences bet(cid:52)een the asset and equity (cid:12)n the (cid:522)real (cid:52)orld(cid:523), there are many variations on these
transaction structure are: basic structures, e.g. an asset sale might include accounts
receivable or an equity sale might exclude long term debt,
Asset Sale (Asset Value) etc. The values provided in this report are stated in terms
of the baseline case as defined above. They are both (cid:522)fair
(cid:12)ncludes (cid:18)(cid:17)(cid:15)(cid:28) inventory(cid:545)supplies, fi(cid:53)ed assets and all
mar(cid:40)et value on a going concern basis(cid:523) estimates, but one
intangible assets. E(cid:53)cludes all liquid financial assets and all
re(cid:413)ects the asset sale and one re(cid:413)ects the equity sale.
liabilities. Buyer operates from newly formed legal entity.
Enterprise Value
Equity Sale (Equity Value)
In middle-market transactions, it is also helpful to
(cid:12)ncludes the assets listed above (cid:19)(cid:15)(cid:24)(cid:22) liquid financial assets
distinguish bet(cid:52)een (cid:522)equity value(cid:523) and (cid:522)enterprise value(cid:523).
(cid:15)E(cid:22)(cid:22) all liabilities (cid:539)(cid:22)T(cid:545)(cid:15)T(cid:540). (cid:12)nvolves the full transfer of the
Enterprise value is a re(cid:413)ection of the firm(cid:521)s value as a
legal entity including all account balances and current tax
functioning entity and it is helpful in that it facilitates the
attributes.
comparison of companies with varying levels of debt.
(cid:17)aturally, the (cid:522)value(cid:523) associated (cid:52)ith these t(cid:52)o distinct
Which Business Value Conclusion is Most Important?
transactions can be substantially different. (cid:12)n practical
terms: The ans(cid:52)er to this question depends chie(cid:413)y upon
the purpose for the valuation engagement. If you are
negotiating the sale/purchase of a business via an asset
sale, then it is the asset value which is most relevant. If
Asset Sale Equity Sale you are filing an estate(cid:545)gi(cid:414) ta(cid:53) return, it is the equity value
which is most important. When evaluating middle-market
The seller keeps the The buyer is acquiring
companies for M&A purposes, both equity and enterprise
cash and receivables ALL of the assets and
value will be useful. If your business is rapidly deteriorating
but delivers the liabilities, on and off
and you are contemplating a reorganization, then
business free and the balance sheet.
liquidation value may be of most relevance.
clear of all debt.
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BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
BizEquity Methodology
While this valuation was generated considering as many Essentially, our focus is to try to provide a proprietary but
company(cid:530), industry(cid:530) and location(cid:530)specific details as real world oriented valuation approach for small, midsize
available, the value presented in this report is an automated and emerging businesses. In doing so, we include methods
estimation of the (cid:9)air (cid:16)ar(cid:40)et (cid:25)alue of the business and its from the following valuation approaches utilized by
assets and liabilities. Some events and circumstances that professional business appraisers today:
might impact the overall valuation of a specific business
may not be taken into account for the purpose of this report.
Valuation methods from the income, market and asset Market Approach
approach have been utilized to reach the valuation results This involves analyzing the recent sales of
for the subject company. The opinion of value given in this comparable businesses. In a way, this is similar to
report is based on information provided by the user and ho(cid:52) residential real estate is valued, i.e., the firm
other sources. This information you input is assumed to be is valued by (cid:52)ay of (cid:522)mar(cid:40)et comps(cid:523).
accurate and complete. However, BizEquity has not audited
or attempted to confirm this information for accuracy or Income Approach
completeness. (cid:12)t(cid:521)s important to note that the estimates The income approach methods seek to transform
presented herein are not (cid:522)final numbers(cid:523). (cid:12)nstead, (cid:52)e measures of profits or cash (cid:413)o(cid:52) into estimates of
are providing general estimates. As a result, the overall value by way of multiples, capitalization rates and
valuation should be considered a frame of reference and not discount rates.
an official appraisal.
Rules-of-Thumb
These are simple but o(cid:414)en po(cid:52)erful valuation
methods that are utilized by market participants
on a regular basis. Some business types are
bought and sold almost exclusively by way of
these (cid:522)industry(cid:530)specific(cid:523) rules of thumb
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BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
Your Valuation
Apex Manufacturing
Industry: 23813 - Framing Contractors
Equity Value (Latest Valuation) This fair market value conclusion is the value of the
company available to its owners or shareholders and
incorporates all of the assets included in the (cid:522)asset
$17,364,967
value(cid:523) plus the firm(cid:521)s liquid financial assets (cid:539)cash, (cid:4)(cid:545)(cid:21),
deposits, etc.(cid:540) and minus its liabilities (cid:539)(cid:22)T and (cid:15)T(cid:540).
Valuation History
::
Valuation History
((
17,367k
17,366k
D
S17,365k
U
17,364k
17,363k
20. Jun 21. Jun 22. Jun 23. Jun 24. Jun 25. Jun 26. Jun
Valuation History
Asset Sale Value Enterprise Value Liquidation Value
$17,005,803 $17,384,967 -$53,250
This common transaction-oriented
This fair market value estimate is The liquidation value conclusion
fair market value conclusion includes
equal to the (cid:522)total value of the firm(cid:523) is based on the key assumption of
the firm(cid:521)s inventory, furniture,
or the value of the firm(cid:521)s equity plus insolvency and the immediate sale of
fi(cid:53)tures and equipment and all
its long term debt, e.g. it re(cid:413)ects the all assets (cid:539)on or off the balance sheet(cid:540)
intangible assets ranging from
value of the entire capital structure at or near (cid:522)fire sale(cid:523) level coupled
customer base to goodwill. (cid:539)equityholders and debtholders(cid:540) or (cid:52)ith the nearly simultaneous
(cid:522)enterprise(cid:523). retirement of all liabilities. This figure
does not include accounts receivable.
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BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
Financial Summary
Apex Manufacturing
2021
Income Assets Liabilities
Revenue Cash Accounts Payable
$22,050,000 $300,000 $780,000
Pretax Income Accounts Receivable Other Short-Term Liabilities
$1,850,000 $750,000 $850,000
Officer Compensation Inventory Bank Loans
$900,000 $450,000 $300,000
Interest Expense Other Current Assets Other Long-Term Liabilities
$25,000 $1,000,000 $20,000
Non-Cash Expenses Fixed Assets Contingent Liabilities
$175,000 $1,000,000 $20,000
One-Time Expenses Intangible Assets
$200,000 $15,000
One-Time Revenues
$100,000
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BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
Financial Summary (Yearly)
Apex Manufacturing
2021 2020 2019
Income Revenue $22,050,000 $22,000,000 $20,000,000
Pretax Income $1,850,000 $1,800,000 $1,650,000
Officer Compensation $900,000 $900,000 $820,000
Interest Expense $25,000 $25,000 $20,000
Non-Cash Expenses $175,000 $165,000 $150,000
One-Time Expenses $200,000 $150,000 $125,000
One-Time Revenues $100,000 $50,000 $100,000
Assets Cash $300,000 $475,000 $350,000
Accounts Receivable $750,000 $600,000 $650,000
Inventory $450,000 $400,000 $500,000
Other Current Assets $1,000,000 $900,000 $950,000
Fixed Assets $1,000,000 $950,000 $975,000
Intangible Assets $15,000 $10,000 $20,000
Liabilities
Accounts Payable $780,000 $800,000 $600,000
Other Short-Term Liabilities $850,000 $900,000 $700,000
Bank Loans $300,000 $400,000 $200,000
Other Long-Term Liabilities $20,000 $50,000 $10,000
Contingent Liabilities $20,000 $50,000 $10,000
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BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
KPI Overview
Apex Manufacturing
In order to better understand your company’s operations, we have calculated a variety of Key Performance Indicators
(cid:539)(cid:14)(cid:19)(cid:12)s(cid:540) for your revie(cid:52) and comparison to industry benchmar(cid:40)s. (cid:12)n terms of valuation outcomes for your firm, (cid:40)ey
factors include size, profitability and gro(cid:52)th.
The next three pages provide an Overview of KPIs; the subsequent group of pages go into further detail about
individual Indicators.
Cash Flow-to-Revenue 14%
Cash-to-Revenue 1%
Receivables (Conversion) 12
Inventory-to-Revenue 2%
Fixed Assets-to-Revenue 5%
Total Debt-to-Revenue 9%
::
Financial Metrics Compared to Revenue
((
30M
20M
D
S
U
10M
0
2019 2020 2021
Year
Inventory TotalDebt Revenues Cashflow Receivables
Page 9 of 27
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BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.