Documents Needed for a Business Valuation
Valuation When Selling a Business Checklist
Valuation When Buying a Business Checklist
A Business Appraisal Checklist to Get You Started
Here is a Business Valuation Checklist of the information we need to get started on your US company’s business appraisal or business valuation report. This list is inclusive, so all the information here may not apply to your unique situation as the business owner (or potential business buyer) as you seek to value a business.
The Business Appraisal Checklist form is also downloadable in pdf format: Business Appraisal Checklist PDF.
Business Valuation Checklist PDF
Once you are a client, we can email you the Business Valuation Checklist in Word Doc form. You can use this checklist as a starting guide to gather the documents needed for a business appraisal.
If you are a small business, don’t let this list intimidate you. We can help you work through it to get the financial information we need to ascertain your company’s fair market value. Your business is worth more than an asset list and we want you to get a fair price when selling a business.
If you are a potential business buyer, The business owner’s representation of the cash flows is critical to your decision-making when buying a business. A business broker can be helpful but remember they are commission driven unless they are a fiduciary.
Whether you are a buyer or a seller, we are a critical part of your due diligence checklist.
Here is an article on top tips for preparing your business valuation and receiving a valuation report that meets your specific needs.
Documents Needed for Business Appraisal
You can also read the steps to a business exit strategy and understand the value of a business and why you need an exit plan.
Do you need a business valuation report to buy an existing business for sale and determine whether the asking price is fair and the cash flow is there? A certified company valuation gives you control over the selling process and great information for the due diligence data room.
Please read our buying an existing business guide to start the due diligence process and justify the purchase price.
Table of contents
What is the intended use of this Business Appraisal or Business Valuation?
- Brief company history and description
- What time frame to transfer or selling your business? Copy of any listing agreement.
- Revenue and earnings (4-5 years if possible)
- Is this business valuation for an SBA or bank loan?
- Are company revenue and earnings stable or growing?
- Are there any confidentiality agreements in place?
- What are the customer concentrations?
- What is the current ownership structure and ownership information? Any sale or purchase of company stock in the last five years? Are there any stakeholder buy-sell agreements?
- What are the Exiting Party or Client goals?
- What deal structure is the Exiting Party or Client open to (if applicable)?
- Will there be sufficient management continuity
- If applicable, a copy of the letter of intent (LOI) or purchase agreement.
Pre-Valuation Information
- Current capital structure with a list of business owners
- Any existing business plans
- List of business assets
- Lease agreements
- Financial Statements, including:
- Balance Sheet
- Income Statement or Profit and Loss Statements
- Cash Flow Projections and Statements
- Account Receivable Aging Report
- Accounts Payable Aging Report
- Business stability analysis
- 4-year historical financial statements (Better if a review from your CPA, but a compilation beats no financials from a CPA)
- 4-5 years of historical tax returns and tax documents
- Current YTD interim financial statements with comparative prior year interim period
- Quarterly summary P&L (past three years)
- Detailed calculation of EBITDA
Revenue
- Description of major product categories
- Revenue by period by significant product category
- Description of the sales process and customer profile
- Market size; share analysis; opportunities and threats to market share
- Key competitors and market information business plan
- Dashboard metrics currently used to evaluate sales performance
Customer concentrations – List the five largest customer revenue amounts for the past three years and a total of all other customers.
Vendor concentrations – List the five largest vendors with numbers for the past three years and a total of all other vendors. Do you have any contracts or licensing agreements in place?
Employees
- Headcount by function
- A brief biography of key employees
- Any deferred compensation or perks?
- Any non-compete agreements?
- Any employment contracts?
Facilities & Assets – ownership or lease terms for all buildings, land, real estate, patents, copyrights, trademarks, intellectual property, intangible assets, websites, equipment, and any other business assets.
Description of any current/pending litigation or tax issues
Have any adjustments to income or personal expenses running through the business? Please read our article on adjustments to income when valuing a company.
Site visit or pictures
You can also check this article as an additional guide to business appraisal to get an insight into the process and why each document is needed for a business valuation report from a certified valuation analyst or CVA at Business Appraisal FL|GA|HI. We want to be your business appraiser with our checklist for selling or buying a business.
Whether selling a business, buying a business, dealing with a partner, confirming a business broker pricing, or transferring the company to a family member, we have a valuation product for your budget and timeframe.
What are your valuation needs? For a quotation, please email us at chris@businessappraisalflorida.com or use the contact form.