T.J. Liles-Tims - Business Valuation & Financial Forensics

06/12/2022

Inflation is the decrease in a currencies purchasing power of goods and services. So, as costs go up, then our dollar (US) cannot buy as much.
There are three primary caused of inflation: demand-pull, cost-push, and built-in (wage) inflation. Without nerding out on all three, the basics are consumers’ demand for a product is more than the supply or the cost (direct or wage) to make the product increases.
How do we fix it is a much more difficult question. We as consumers can “help” fix it by being more cautious and conscious of what we are buying which help alleviate high demand. The cost-push and built-in (wage) inflation are what is trying to be fixed by the Federal Reserve and our politicians through legislation . So, once again, your VOTE matters.

03/22/2021

Recently completed a business valuation of a non-controlling, minority equity interest.
Narrowed 132 companies to 13 guideline comparables with stats of:
Price-to-book ranged from 0.72x to 0.98x with an average at 0.86x and a coefficient of variation of 22.5%.
Price-to-sales ranged from 1.88x to 3.83x with an average of 2.62x and a coefficient of variation at 29.2%.
Price-to-earnings ranged from 9.29x to 17.31x with an average of 12.13x and a coefficient of variation of 22.5%.

03/19/2021

For tax and business valuation professionals. Been wondering how to handle the PPP forgiveness if it creates negative basis, the AICPA has issued a letter requesting guidance.

In a letter dated March 15, the AICPA asked for IRS guidance on how S corporations and partnerships should treat tax-exempt income from PPP loan forgiveness, especially when it occurs during a different tax period.

03/16/2021

You think trading stocks for a publicly-traded company is hard, try valuing a privately-held company and letting them know the ‘value’ of their blood, sweat, and tears.

03/10/2021

Yes, this means you! It is never to early.
1. Guardians and Conservators for Minor Children - who is going to take care of your kiddos?
2. Personal Representative - who is going to manage your assets?
3. Patient Advocate - who is going to make medical decisions on your behalf?
4. Personal Property - who gets what of your assets? Should someone specific get a particular item?
5. All Other Property - where does the remaining property go after 4 above?
6. Charitable Bequests - should charity get any part of your estate?
7. Distributions to Beneficiaries - who, what, when, and how?
8. Pets - who gets them and should any of your estate go to care for them?
9. “Ultimate Takers” - if your intended beneficiaries are no longer living who gets your estate (parents, siblings, nieces and nephews, charity)?
10. Info to Gather - info on all your assets (home, car, art, wine); contact info for beneficiaries; prior estate docs; operating agreements of business owned; buy-sell agreements; divorce papers.
CREDIT: - “Preparing for an Estate Planning Consultation: 10 Items to Consider Before Meeting with Your Attorney”

03/10/2021

"By failing to prepare, you are preparing to fail." - Benjamin Franklin

While most initial meetings with an estate planning attorney will result in some questions you likely have never considered, there are many ways in which you can prepare for a thoughtful and productiv

03/09/2021

In today’s business valuation industry so much focus is on getting things done quickly. Being thorough in a business valuation is a must because in most cases the business being valued is the largest asset of the shareholders. This is why business valuation is a full-time gig not part-time.

03/04/2021

When involved in business valuation and/or litigation matters it is important to pay careful attention to the structure and grammar within each sentence in an Agreement.

Distinguishing between an entity and the ownership of equity in that entity is not difficult. But it is surprising how often those two...

03/03/2021

Just when you thought PPP forgiveness would not be taxed, the states tell you to think again!
This is a map detailing out how each state is treating the PPP forgiveness. In short, green indicates the state will NOT tax the PPP forgiveness and yellow means the state wants its tax on that forgiveness.

02/17/2021

Used to Digital Forensics and Forensic Accounting were handled together. Today, not so much...

Digital forensics investigators are experts in locating, obtaining, preserving, and analyzing data from various sources. These professionals often play a central role in the investigation of cybersecu

02/17/2021

This is more scientifically referred to as “business valuation.” A businesses value is determined by three main “approaches” - asset, income, and market.
Asset Approach - is generally the primary approach to valuing a holding company or a company that is likely insolvent. This approach primary looks at the value of the ‘hard’ assets after debt has been satisfied.
Income Approach - is generally used for small closely-held operating companies. The discounted cash flow (DCF) “method” of valuation is based on this approach. The basic principle is the income generated by a companies assets is more valuable than the assets themselves.
Market Approach - is probably the most popular approach among those novice to valuation. This approach deals with multiples such as price-to-EBITDA. This is by far the easiest but misunderstood approach to valuation because of what it entails to arrive at the appropriate multiple. Each company is different and, therefore, multiples are generally different.
A lot can go wrong with a valuation - garbage in, garbage out - so make sure you know what you are doing or hire someone certified in business valuations.

02/14/2021

app says it is 6 degrees with a wind chill of -14. I have not quite decided if this was good prep for next season, meditation, or weird so I am going to say all of the above.