Santa Barbara Valuations Inc.

To bring a clear, fundamentally sound finding of value to each client

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When competitors' cases go to Tax Court or when negotiations fall apart over valuation, it is often because the analyst has failed to use good fundamentals.  Our positions are engineered so that authorities have no choice but to consider them.  Four factors set us apart - and are why we are able to produce reliable results for our clients.        

First, we examine companies like a private equity investor, not like an accountant.  Value is driven by cash flow, margin, growth rate, entry barriers and market.  These elements explain the value of all business types - seed and early stage, mature, professional services, retail, distribution, software, manufacturing and real estate. 

   Next, we use scientific method to connect company performance and industry data to value.  Scientific method is superior to approximations using CAPM, statistics, big data, binomial lattices and differential equations that certainly take skill and are intellectually stimulating but can be enormously inaccurate.  

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Critically important, we flex between approaches for the situation and rely on M&A data like private equity investors and business brokers do.  45% of valuators surveyed in 2022 regularly compare the private company to public companies.  Most accountants use public market data and one long, complex formula.  With the different market and the extra variables involved, it requires many more judgements.   Business brokers find these types of appraisals to be unreliable because it is an apple-to-oranges comparison.     

We do too.

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Fourth, we examine inventory, contingencies and owner issues that are either skipped in the accountant's formula or are found outside the financial statements.  These elements are key for retail, distribution, real estate holding companies and settling equity holder buy-outs.  

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For more depth, check the site library.

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