Question: Based o n this scenario, create a business valuation using the template provide below. Thanks i n advace! I appreciate all the help! Scenario: Husband

Based on this scenario, create a business valuation using the template provide below. Thanks in advace! I appreciate all the help!
Scenario: Husband and wife are filing for divorce. They have operated a joint forensic accounting firm together for years as partners. The wife decides she is ready to step away from the firm, and her soon-to-be ex-husband wants to buy her out. The wife believes the firm is worth more than her husband is saying, as they have both done their own business valuations. The wife has hired your Forensic Accounting firm to do an unbiased business valuation of their firm. She needs this completed by September, since that is the next date she will be meeting with her attorney to present an offer to her estranged husband on the business. She reminds you, as you should already know, that each client she has brought to the firm is also worth money.
Chapter 11: Business Valuation
I. Define the Engagement (name engagement here)(30 points)
A. Purpose
B. Type
C. Standard of Value
D. Premise of Value
E. Valuation Date
F. Ownership Interest to be Valued.
II. Gathering the Necessary Information (should have a pretty long list of information...at least 8-10 pieces!)(50 points)
A. What various pieces of information do you need to gather? List each one as a separate letter under this area.
1. For each piece of information listed, what is your source for the information or how would you go about finding the data you need?
B. Example: Bank statements
1.1. Send a letter of engagement to the bank requesting these documents.
III. Analyze the Information Gathered (50 points)
A. Phase 1: Analyzing Financials
1. Out of the information gathered in section II, lost all of the information that is related to financials under this phase.
a) For each financial piece of information, how could you properly analyze it for accuracy?
b) How do you know or how can you verify this piece of information is legitimate and reliable?
c) Will other pieces of information gathered from the above be used to support this? List the ones that you will use.
d) Is this information considered 1st,2nd,3rd, or 4th party data?
B. Phase 2: Other Significant Relevant Factors
1. Listed all of the information gathered from section II that is not directly related to financials (should be all other information not listed in phase 1).
a) Under each piece of information listed, state why it is important and how it is relevant to the valuation. In other words, how will it impact the business valuation?
IV. Estimate the Value of the Company (30 Points)
A. Which approach do you think would be best to estimate the value of the company?
1. List all of our reasons why this approach is best (remember, you may be stuck explaining yourself fin court, so you want to have this thought-out and be ready!).
V. Issue the Valuation Report (20 Points)
A. Which type(s) of written report(s) will you need to provide, based on the type of valuation you are completing?
VI. What other valuation issues, species to your type of valuation could you face? (aka the situation/reasons for the valuation to begin with).(This could be specific in relation to gathering information, analyzing the information, obstacles you are likely to face, etc.) Try to think of, list, and explain at least 3 issues. (30 Points).

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!