Business Valuation Services
The Largest Valuation Firm of its Kind
Serving Business Owners Nationwide

The Smart Business Approach

It is critical to determine the purpose of the business valuation. The purpose of a business valuation shapes the choice of valuation methods(s) used by the business valuator. Different valuation approaches and concepts will be appropriate for different business valuation purposes.

Many businesses owners use tax returns or financial statements prepared using the tax basis of accounting for the financial presentation of their business. Other business owners elect to incur the costs charged by Certified Public Accountants and have prepared either reviewed financial statements or, even more costly, Certified Financial Statements. In either of the mentioned situations, the financial information mentioned reflects the "historical cost basis of accounting;"not the current market value of assets, liabilities and net worth (sometimes referred to as Owner's Equity or Stockholder's Equity) of the business.

While this may be good for tax purposes, tax return financials do not reflect years of hard work in accumulating business assets. The business goodwill or intangible value, which represents a major component of what the business is worth in many cases, is not a consideration for income tax purposes and, therefore, not addressed in financial statements for tax purposes.

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RWS employs an established technique utilized and accepted by business owners, business lenders as well as business brokers defined as Recasting financial Statements, more fully described as follows:


Historical income statements are adjusted to present the business as if it had been managed to maximize profitability. Since privately owned companies tend to keep reported profits and resulting taxes as low as possible, adjusting the financial statements is an important element to understand the true earning capacity of the business. These adjustments allow for meaningful comparisons with other investment opportunities.

The business goodwill or intangible value, which represents a major component of the total business value in many cases, is completely ignored for income tax purposes and is not fully addressed in financial statements, although in recent years the accounting profession has moved in the direction of disclosing fair value for assets reflected on the balance sheet of audited financial statements.

For a business to grow and expand in today's market, capital and financing are essential. A professionally prepared business valuation such as those prepared by RWS Business Valuation Services are powerful tools.

A professionally prepared fair market value or selling price business valuation is essential to:


  • Businesses seeking access to capital to grow and expand in today's market, or

  • When a business buyer is considering the acquisition of a business, or

  • When the business owner is ready to consider selling their business

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