A business appraisal is a formal assessment of a company’s value, typically conducted by a qualified appraiser. This process takes into account various factors, including financial performance, market conditions, and the company’s assets and liabilities. Business appraisals are often used in situations such as mergers and acquisitions, financing, and litigation.

Characteristics
– Objective Analysis: A business appraisal provides an unbiased assessment of a company’s worth.
– Comprehensive Evaluation: It considers multiple factors, including financial statements, market trends, and industry comparisons.
– Professional Standards: Appraisals are conducted by certified professionals who adhere to established guidelines and standards.

Examples
– Mergers and Acquisitions: A company looking to acquire another may request a business appraisal to determine a fair purchase price.
– Divorce Proceedings: In divorce cases, a business appraisal may be necessary to establish the value of a business that is part of the marital assets.
– Estate Planning: Business owners may seek an appraisal to understand the value of their business for estate tax purposes.