• Practice Management - QuickRead Top Story

    The Continuing Relevance of Financial Statements

    April 15, 2026

    The Key Value of Value A complete set of financial statements also include statements of cash flows and other comprehensive income. These statements play important roles, but earnings are still used in these as the starting and dominant measure. Occasionally, the relevance of financial statements is questioned; this article is written to reaffirm their importance. Accountants have been preparing some sort of financial statements since the beginning of written records, which were developed by the Sumerians in cuneiform around 3400 BCE. A more formal, and familiar, report was developed around 1350 CE by the merchants of Venice, Genoa, and surrounding…

  • Mergers and Acquisitions/Exit Planning - QuickRead Top Story - Valuation/Appraisal

    Valuation Issues in M&A

    November 12, 2025

    In Anticipation of Going to Market Valuations performed for mergers and acquisitions are different than most of the traditional valuation work. The author of this article shares the standard of value used in these engagements, the due diligence conducted, and merits of preparing a calculation report in anticipation of going to market. Valuations performed for mergers and acquisitions (M&A) are different than most of the traditional valuation work we handle on a day-to-day basis. One of the biggest differences is the standard of value used. Typically, the valuation professional will use investment value rather than fair market value. NACVA’s definition…

  • QuickRead Top Story - Valuation/Appraisal

    The Cash vs. Hybrid vs. Accrual Conundrum

    November 3, 2021

    What to Ask for and Use? Most small businesses use the cash basis of accounting. Despite that practice, prospective clients will prepare their books in a variety of different ways that do not conform with the accounting cash basis. There are hybrid and accrual cash basis and the business valuation practitioner needs to recognize the differences between these forms of accounting. In this article, the author shares the importance of understanding each and what to do and ask for from the client to better understand the financial disclosures. Which should I ask for? Does it really matter? Isn’t each one…

  • QuickRead Top Story - Valuation/Appraisal

    Which is Best: EV/EBITDA, EV/EBITA, or EV/EBIT?

    January 17, 2018

    Adherence to Development and Reporting Standards in Family Law Litigation When applied correctly, the Market Approach can link value to market evidence and help support a thorough and well-reasoned valuation. However, valuation analysts often struggle with a variety of challenges when applying the Market Approach that include locating and selecting good comparable companies, selecting or calculating various valuation multiples from reported data, and weighting or selecting indications of value derived from various applied multiples. Recently published research from Doron Nissim at the Columbia Business School at Columbia University NY may shed some light on the best measure of operating performance…

  • QuickRead Top Story - Valuation/Appraisal

    New Sanity Check Model

    January 10, 2018

    Provides Independent Validation of Indicated Values Newly-minted valuation analysts may question the reasonableness of their conclusion of value. That is natural. In this article, the author introduces readers to the Hypothetical Willing Buyer-Willing Seller Sanity Check Model. This is a model developed by the author in connection with valuation of a 100% controlling interest.

  • Valuation/Appraisal

    EBT or EBITDA

    September 27, 2017

    Which Measure is Best for Normalization? Analysts face a potentially major issue when using EBT as the starting point for normalizing future earnings using traditional business valuation fundamentals. An issue arises when assumptions used in forecasting key expenses for normalized earnings differ from the way those expenses were calculated in the historical EBT. Key expenses that can have a large impact on ultimate value include non-cash items and related capital expenditures as well as interest expense and debt assumptions. This overview points out the reasons why traditional methods may not be viable for every situation. For a more detailed discussion…

  • QuickPress

    Non-GAAP Measures: The SEC Updates Interpretation of Disclosure Regulations

    June 8, 2016

    While observers appear to be increasingly worried about the proliferating use of non-GAAP measures, a useful debate on non-GAAP measures would probably focus on the nature of their presentation within various disclosures rather than whether or not they should be outlawed altogether.  Sujan Rajbhandary, vice president, senior member of Mercer Capital’s Financial Reporting Valuation Group, explains. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Non-GAAP Measures: The SEC Updates Interpretation of Disclosure Regulations. This article is republished from Mercer Capital’s Financial Reporting Blog.  It is reprinted with permission.  To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.

  • Mergers and Acquisitions/Exit Planning - QuickRead Featured - QuickRead Top Story

    Using ESOPS in Succession Planning

    February 4, 2015

    A Case Study An ESOP is one of many options available to business owners considering succession-planning options. There are substantial advantages, but there are also regulatory and cost considerations. A feasibility study may suggest whether the ESOP is an appropriate option. In this article, authors Kelly Finnell and Andrew Holmes share their views on when an ESOP is feasible using a case study.

  • Mergers and Acquisitions/Exit Planning - QuickPress

    A Note on ESOP Valuation

    February 4, 2015

    A Note on ESOP Valuation[1] One of the most critical issues regarding valuation is the concept of adequate consideration.  The ESOP trustee cannot pay more than “adequate consideration” for the stock it purchases.[2]   In the context of an ESOP, ERISA defines adequate consideration as the stock’s “fair market value…as determined in good faith by the trustee…”[3]  The proposed Department of Labor regulations define “fair market value” as the “price at which [the stock] would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under…