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Five Factors to Consider When You Have to Value Your Business 

Divorce is difficult enough to manage, but if a married couple who is dissolving their marriage has a business, valuing the business is a necessary step to finalize the divorce. Typically, to determine a value of a business, qualified professional business evaluators will be used. Often, in a divorce, more than one will make an opinion of the value of the business. If the opinions are similar, it can be easier to determine the business’s worth. But, if the opinions are far apart, then it is reasonable to either take the average of those determinations or bring in a third professional to formulate another opinion.

Asset division can be one of the most difficult aspects of divorce. When it comes to financial matters, figuring out who gets what can take even the most cordial negotiations and make them become the most contentious. If you live in Indiana and you and your spouse have decided to divorce, Christopher L. Arrington is a Danville divorce lawyer who can help you through every step of the process and protect your best interests.

How is a Business Valued?

The true value of a business comes down to how much money prospective buyers would pay in association with how much a business owner would accept under normal circumstances. To get a better idea of that price point, the financial records over a period of up to five years may be reviewed. Tax returns, profit and loss statements, balance sheets, and many other documents related to the finances and business operations will be scrutinized. 

There are several pieces of information a professional valuator is going to review including:

  • How much profit or income the business generates.
  • Any debts and financial obligations the business must pay.
  • How much the assets the business owns are worth.
  • Operating costs and other business expenses.
  • How much interest each spouse has in the business.

Even when professional valuators come up with a number that they believe is fair, that does not always mean that another evaluator will agree and make a similar estimation. Still, it is important to utilize the services of a professional evaluator for both the wife and the husband. And, if the professionals who are employed can come together and agree on the methods for valuation at the onset of the process, coming to an appropriate business value can go much more smoothly.

Divorces can be costly and emotional. Finding ways to expedite things so that each party walks away with a fair arrangement is the ideal goal. Finding areas of agreement in some situations can be a struggle, but the more that two parties are able to be cooperative and work together, the better things can be resolved.

Christopher L. Arrington is a compassionate and supportive Indiana divorce attorney who is skilled at helping people navigate divorce by offering cost-effective and high-quality legal services.

Speak to an Indiana Divorce Attorney Today

Having a competent and knowledgeable legal advocate on your side when you are going through your divorce can protect you and help you obtain the most favorable outcome possible. Call the Danville divorce lawyer Christopher L. Arrington today to schedule a free consultation at (317) 745-4494.

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