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Precast Consulting Services, Inc. What’s My Business worth

Precast Consulting Services, Inc. What’s My Business worth. Left click to advance - Right click for controls The back arrow will return you to the website . Precast Consulting Services, Inc. What’s My Business worth. Agenda What’s Precast Consulting Business Valuation Restated Earnings

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Precast Consulting Services, Inc. What’s My Business worth

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  1. Precast Consulting Services, Inc.What’s My Business worth Left click to advance - Right click for controls The back arrow will return you to the website

  2. Precast Consulting Services, Inc.What’s My Business worth Agenda • What’s Precast Consulting • Business Valuation • Restated Earnings • Working capital values • Fixed asset values • Goodwill • Summary

  3. Precast Consulting - The Services What’s Precast Consulting We are a general management consulting firm focused only on the Precast Industry • Finance • Acquisitions / dispositions • Financial benchmark analysis • Sales & marketing • New product development • Margin improvement • Profitable sales growth • Operations • Work group productivity improvement • Project management • Quality programs – rework reduction • Manufacturing improvements • Management Professionalism for the Precast industry • Contact information billray@precastconsulting.com web site www.precastconsulting.com 770-979-3711

  4. Precast Consulting Services, Inc.What’s My Business worthIs value like beauty, something merely in the eye of the beholder?

  5. Precast Consulting Services, Inc.What’s My Business worth • Book Value Easily taken off the books but doesn’t reflect market value • Liquidation value Auction value, use for a bankruptcy or forced sale • Replacement value Market value, Willing seller, motivated buyer • As-is, Where-is, current condition • Typically related to cost of new • Value depends on condition and supply/demand for that equipment • Financial values Inventory, Accounts receivable, Retainage, other current assets • Collection problems must be considered in receivables and retainage • Is it good inventory not requiring rework • Goodwill Going concern value • Derived from business relationships in the concern’s marketplace • Based on the earnings of the business

  6. Precast Consulting Services, Inc.What’s My Business worth Typical Producer with Restated Accounts for Valuation Purposes Income Statement ($000) per Books Sales $ 15,000 Cost of Goods Sold Labor & Materials 6,000 Manufacturing 1,950 Depreciation 300 Engineering 600 Other direct costs 600 Shipping 1,050 Erection costs 2,100 Total COGS $ 12,600 84% Gross Margin $ 2,400 16% Sales, General & Admin 1,950 Interest Expense 324 Profit before taxes 126 0.8%

  7. Precast Consulting Services, Inc.What’s My Business worth Typical Producer with Restated Accounts for Valuation Purposes Income Statement ($000) per Books Change Restated Sales $ 15,000 $ 15,000 Cost of Goods Sold Labor & Materials 6,000 6,000 Manufacturing 1,950 (324) 1,626 Depreciation 300 300 Engineering 600 600 Other direct costs 600 600 Shipping 1,050 1,050 Erection costs 2,100 2,100 Total COGS $ 12,600 $ 12,276 Gross Margin $ 2,400 $ 324 $ 2,724 Sales, General & Admin 1,950 (350) 1,600 Interest Expense 324 324 Profit before taxes 126 674 800

  8. Precast Consulting Services, Inc.What’s My Business worth Typical Producer with Restated Accounts for Valuation Purposes Balance Sheet (000) Assets Liabilities & Equity per Books Cash 300 Current Liabilities Accounts Receivable 2,400 Trade Accounts Payable 1,366 Over 90 Receivables 240 Accrued Expenses 416 Retainage 1,050 Line of Credit 720 Total Receivables $ 3,690 Inventory 416 Total Current Liabilities $ 2,522 Other current assets 15 Total Current Assets $ 4,421 Mortgage $ 1,980 Gross Fixed Assets & Land 9,000Total Liabilities $ 4,502 Accumulated Deprec. (4,050) Net Fixed Assets $ 4,950 Deferred taxes 1,500 Owner's equity $ 3,368 Total Assets $ 9,371 Total Debt & Equity $ 9,371

  9. Precast Consulting Services, Inc.What’s My Business worth Typical Producer with Restated Accounts for Valuation Purposes Balance Sheet (000) <-------- -- Assets -----------> Liabilities & Equity per Books Restated Cash 300 300 Current Liabilities Accounts Receivable 2,400 2,400 Trade Accounts Payable 1,366 Over 90 Receivables 240 0 Accrued Expenses 416 Retainage 1,050 525 Line of Credit 720 Total Receivables $ 3,690 Inventory 416 208 Total Current Liabilities $ 2,522 Other current assets 15 0 Total Current Assets $ 4,421 $ 3,433 Mortgage $ 1,980 Gross Fixed Assets & Land 9,000 Total Liabilities $ 4,502 Accumulated Deprec. (4,050) Net Fixed Assets (incl. Land) $ 4,950 $ 5,445 Deferred taxes 1,500 Owner's equity $ 3,368 Total Assets $ 9,371 $ 8,878 Total Debt & Equity $ 9,371

  10. Precast Consulting Services, Inc.What’s My Business worth Typical Producer with Restated Accounts for Valuation Purposes Restated Valuation of Business ($000) Valuation Current Assets (restated) 3,433 less Trade Accounts Payable (1,386) Less Accrued Expenses (416) Net Working Capital . . . . . . . . . . . . . . . . . . . . . . . $ 1,630 .. Plant & Equipment Appraisal. . . . . . . . . . . . . . . . $ 5,445 . Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ ? Total Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ Less Line of Credit (720) Less Mortgage (1,980) Net Value to Owner . . . . . . . . . . . . . . . . . . . . . . . . . $ ?

  11. Precast Consulting Services, Inc.What’s My Business worth Typical Producer with Restated Accounts for Valuation Purposes Restated Valuation of Business ($000) ValuationStandard Earnings Current Assets 3,433 less Trade Accounts Payable (1,386) Less Accrued Expenses (416) Net Working Capital . . . . . . . . . . . . . . . . . . . . . . . $ 1,630 Standard earnings @ 6% $ 98 Plant & Equipment Appraisal. . . . . . . . . . . . . . . . $ 5,445 Standard earnings at 10% $ 545 Total standard earnings $ 642 Restated earnings $ 800 Excess earnings $ 158 Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 788 Capitalize excess earnings ....X 5 (i.e.. 20%) Total Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,864 Less Line of Credit (720) Less Mortgage (1,980) Net Value to Owner . . . . . . . . . . . . . . . . . . . . . . . . $ 5,184

  12. Precast Consulting Services, Inc.What’s My Business worth - Summary • Assets • Current Assets • Accounts Receivable – must be collectable & not over 90 days old • Inventory – Must be for work under contract • Retainage – Typically heavily discounted • Plant & Equipment • FMV appraisal, as is - where is • Good condition & in demand, up to 75% of new • Fair condition – 40-60% of new • Land • Appraisal value • Typically more than book value • Goodwill • Excess earnings capitalized

  13. Precast Consulting Services, Inc.What’s My Business worth - Summary • Goodwill • Standard earnings by asset • Net working capital – 5-6% • Fixed assets – 10-15% • Restated Income • Include manufacturing efficiencies achievable by the buyer • Exclude nepotism & patronage positions • Exclude accelerated write-offs driven by tax considerations • Goodwill values • Use restated income – average for several years • Compute excess earnings above standard earnings • Capitalize excess earnings at 20-25%

  14. Precast Consulting Services, Inc.What’s My Business worth • What can Precast Consulting do? • Dispositions • Business valuation • Deal analysis • Expert working for you • Acquisitions • Valuation and appraisal • Deal analysis • Financing • Due diligence investigations • Not a broker • Consulting role, without commission or placement fees • No listing agreement

  15. Precast Consulting Services, Inc.What’s My Business worth

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