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Why Business Valuations Matter: The Importance of Knowing Your Company’s Worth

Why Business Valuations Matter: The Importance of Knowing Your Company’s Worth

As a business owner, dealing with financial reporting and external audits can be a  hassle. At VSP we provide independent audit evidence for business acquisitions with purchase price allocation and ongoing asset impairment testing, such as goodwill impairment. Business valuations are necessary for various purposes, including actual transactions like purchases, sales, shareholder buyouts, donations, as well as non-transactional scenarios like tax planning, share reorganization, insurance coverage, and matrimonial disputes. Rely on you to be your trusted business valuation accountant so planning in both transactional and non-transactional contexts is in expert hands.

Business owners can gain valuable insight into the current worth of their company by obtaining a preliminary valuation report from a qualified professional such as a Chartered Business Valuator. For Exit Planning, it is recommended to have a certified valuation specialist on the Advisory Team. The preliminary valuation, along with a five-year cash flow forecast, helps advisors determine the best course of action for owners to achieve their desired outcomes. While the cost of a preliminary valuation may be a concern, it is essential for owners to understand their company’s value to receive fair market value when leaving their business. The valuation also provides insight into the amount of business growth needed to meet financial objectives by the departure date.


Upon receiving a preliminary valuation, business owners may realize that their business requires no growth, or that they need to increase their business’s value significantly, potentially postponing the departure date. Ultimately, whether to sell or keep the business in a competitive market is a crucial decision that should be carefully considered. Contacting a professional at VSP can help set the business up for future economic success.

If you are considering when to sell your business, it is important to conduct a professional business valuation that takes into account the unique risk factors of your business. Our valuation services can assist you in developing an exit/succession plan, resolving shareholder disputes, and making informed decisions about keeping or selling your business in 2021.

Navigating complex business decisions as a manager can be challenging, and may require the expertise of a business valuation expert. Our knowledgeable team can provide you with valuable information to aid in the decision-making process concerning your business’s future. VSP Valuation offers professional business valuation services in Toronto to the business and legal communities. We provide independent litigation support services in the Greater Toronto Area for commercial, shareholder, or matrimonial disputes.

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