Business valuations are performed for a number of purposes, but are often a central, and difficult, issue in a divorce proceeding. When marital property includes an interest in a privately-held business, the valuation and distribution of the business can become even more complex. To appropriately address this issue, attorneys and their clients often retain the services of an expert in the field of business valuation.
The expert, in turn, will then apply one, or a combination of, three generally-accepted methods for determining the value of a privately-held company; (1) the Income Approach; (2) the Market Approach; and (3) the Asset Approach. Given the volatile economy, the application of the Market Approach presents added complexity, with the proper selection and implementation of pricing multiples of particular importance.
