1 / 11

BUS3140

BUS3140. Lecture 8. Agenda. Describe valuation techniques and the scenarios that can trigger a change in valuation Identify and describe Government programs: available incentives available tax shelters taxes and taxation incorporation Exit Strategies

baylee
Download Presentation

BUS3140

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. BUS3140 Lecture 8

  2. Agenda • Describe valuation techniques and the scenarios that can trigger a change in valuation • Identify and describe Government programs: • available incentives • available tax shelters • taxes and taxation • incorporation • Exit Strategies • Discuss implications of Private vs. Public ownership • Describe the process of selling a privately owned Canadian company • Describe the IPO process

  3. Valuation techniques • Most common method: compare valuation ratio with a comparable public company… • A good one is Price/Earnings (P/E) ratio • Discounted multiple of current revenue • Book value (total assets – (intangible assets (patents, goodwill) +liabilities)) • Revenue over a certain period • Discounted cash flow (beyond our scope) http://www.cbc.ca/news/business/how-much-is-your-small-business-worth-1.1000112

  4. Factors that can affect your valuation/stock price • news releases on earnings and profits, and future estimated earnings • announcement of dividends • introduction of a new product or a product recall • securing a new large contract • employee layoffs • anticipated takeover or merger • a change of management • accounting errors or scandals

  5. Government programs • http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/Home (watch the small video) • Help on getting financing: • http://www.ic.gc.ca/eic/site/icgc.nsf/eng/h_07047.html • start to finish lifecycle assistance from the Government: • http://www.ic.gc.ca/eic/site/icgc.nsf/eng/h_07098.html?Open&src=mm2#ic-subnav-1

  6. Government programs (2) • Government Grants and Financing • Grants, contributions and financial assistance • Loans and cash advances • Loan guarantees • Tax refunds and credits • Wage subsidies • Equity investing • * for all of these, ensure your Business Plan is up to date and solid!

  7. Implications of private vs public ownership • Financial reporting • Public = separate entity, private = part of your entity • taxes

  8. Selling your business • If you are selling your business or part of your business, you generally set an amount for the entire business. • This amount will be based on the value of each asset, the value of inventory held, and goodwill • In some cases, your sales agreement sets out a price for each asset, a value for the inventory of the company and, if applicable, an amount that can be attributed to goodwill. • Depending on your situation, you may have a recapture or a terminal loss of capital cost allowance (CCA) on the sale of your assets. • http://www.cra-arc.gc.ca/tx/bsnss/tpcs/lf-vnts/sllng/menu-eng.html • http://www.cra-arc.gc.ca/tx/bsnss/tpcs/lf-vnts/sllng/sllng-eng.html

  9. Selling your business (2) • Tip: sell the business when the time/reason is right (don’t sell when its going downhill) • Identify what is going to be sold (physical assets/goodwill/trademarks/client lists/existing contracts/etc) • Get help with this part by a trained professional • Make sure everything is in order (you want to show your business well)

  10. The ipo process • Step 1 – is going public a good idea? • Evaluate your company’s readiness • Assess market acceptance • Asses impact on your company • Step 2 – prepare to go public • Thorough review of your company • Decide on corporate and management structure • Assemble your team • Plan your timeline • Develop the offering http://www.kpmg.com/Ca/en/topics/IPO-Services/Documents/KPMGs-Guide-to-Going-Public.pdf

  11. The ipo process • Step 3 – executing your IPO • Prepare preliminary prospectus • Underwriters’ due diligence • Apply for a stock exchange listing • Regulatory review • Marketing • Pricing • Finalize documents • Closing • Now your company s public and must adhere to rules of public company http://www.kpmg.com/Ca/en/topics/IPO-Services/Documents/KPMGs-Guide-to-Going-Public.pdf

More Related