Litigation Speaks: Recent Episodes
J. Richard Claywell
Litigation Speaks is designed to assist attorneys in identifying when the expert's work product is not based on reliable principles and methods. We can provide you with information that will allow you to make better informed settlement offers and/or trial strategies. Every month we will make available to you real world examples of the misapplication of principles and methods of business valuations, economic damages and or forensic accounting.
In this episode, we discuss why using a sales multiple to value a business can be misleading. While quick, it overlooks key factors like profitability, cash flow, and risk. Learn why more detailed methods, like Discounted Cash Flow (DCF) analysis, offer a more accurate view of a business’s true value.
5 Steps to Deciphering the Statement of Cash FlowsFollow these steps to transform from confused to confident in your financial statement analysis.
Struggling with financials?Attorneys, ever feel lost in a sea of numbers?Confused by income statements in valuations?Your secret weapon?Accrual over cash accounting.Why? Realistic earnings snapshot.
Memorial Day is a solemn occasion dedicated to honoring the brave men and women who made the ultimate sacrifice in service to our country. As we remember those who risked and lost their lives, we reflect on their courage and the profound impact of their sacrifice. Being a veteran myself, I stand in deep reverence for my fallen comrades who are no longer with us. Today, we unite in gratitude and remembrance, ensuring their legacy lives on in our hearts and minds.
This week we'll discuss how to choose between debt and equity for business growth. We'll cover the differences between borrowing money for short-term needs and owning a share for long-term goals, their costs, and how they impact your control over the business. We'll also highlight the importance of considering the exit strategy, as debt has a set end date, while equity can be indefinite.
Ever felt that gnawing in your gut, but you played it safe instead?Story Time: I once sat on a deal that smelled like trouble. Good on paper, but my gut screamed 'no'. Ignored it. The deal? A disaster. Taught me more than any success ever did.
Discover the intricate world of business valuation, where normalizing expenses unveils companies' true value, ensuring fairness and accuracy in financial assessments.
End Fraud Now!Stop Fraud in Its Tracks Through Strong ControlsInternal controls are essential for ensuring operational integrity Financial reliability, and legal compliance within organizations.
Ever found $30K in 'entertainment' expenses and wondered...why so entertaining?"Business partners decided it was time to sell. But first, a valuation.Diving into the books, we stumbled upon an unusual expense spike.Entertainment' costs soaring. Curiosity piqued.A closer look revealed a recurring name: 'Stiletto'.Stiletto's wasn't a shoe brand. It was a gentlemen's club.
Ever found a Picasso in the attic?Sounds absurd, right?But in my world, it's just another Tuesday.
Ever mediated a vacuum cleaner dispute? Behind the scenes...Lawyers, laughter, and a vacuum. Sounds like a sitcom, right? Nope. It's divorce court reality.
Explore the hidden depths of financial statements where profit numbers may not always tell the full story. This episode unveils the subtle art of reading between the lines, empowering attorneys to uncover the truth behind the figures.
Explore 'The Legal Ledger' podcast, where we unravel the role of forensic accountants in legal dramas. Discover how they turn the tide in court cases, from fraud detection to dispute resolution. Quick, engaging talks for attorneys and finance buffs. Tune in for insights on making every number count in the courtroom!
Why are forensic accountants so expensive?Let me explain...Imagine you're trying to complete a massive, intricate jigsaw puzzle.This puzzle is made up of tiny piecesEach represents a financial transaction or activity.A forensic accountant is like a puzzle masterWho meticulously examines, analyzes, and fits these pieces togetherAnd creates a clear picture of a person’s or company’s financial situation.
The importance of site visits in business valuation is highlighted. Site visits provide a deeper understanding of a company's operational aspects, tangible assets, and overall environment, revealing insights that financial statements alone cannot capture. They verify data accuracy, offer operational insights, assess risks, verify tangible assets, and consider environmental and locational factors. Site visits are a crucial component in achieving more accurate and reliable business valuations.
As a seasoned business valuation expert, I understand the intricate art and science of determining a company's worth. However, there are instances where aligning with a client's attorney's approach isn't straightforward. Let's delve into the reasons why I might be unable to meet a client's business valuation request in the precise way their attorney desires while keeping independence, business valuation approaches, Revenue Ruling 59-60, professional standards, and objectives in mind
Let's imagine you're selling your house When someone wants to buy it from you, they have to pay you money. sometimes there's a disagreement about how much money should be paid we need to figure out the right amount in a fair way There are two special tools that are used to figure out the fair amount of money One is called the "cost of equity," and the other is the "safe rate." Cost of equity: would be suitable if your house was part of a larger property or real estate market considering factors like how much the property value changes over time and the extra profit people expect for taking on the risk of owning property
Why does a valuation cost so much??? A business valuation is figuring out how much a company is worth. It's essential for many legal and financial situations. Such as buying or selling a company. Resolving disputes, or dealing with taxes.
Once upon a time.... In a captivating business world, fortunes hung in balance. A rule called Revenue Ruling 59-60 guided valuations. Dr. Michael Porter, a renowned expert, discovered strategic insights.....
The electric vehicle industry is booming more people are becoming aware of the environmental benefits of cleaner energy sources BUT did you know that new companies trying to break into the electric vehicle market face several challenges?
This week's episode I cover one of the five forces of industry. Join me as I discuss an in-depth description of "Threat of new entrants".
Do you know if your expert followed recognized valuation practices? Consistency in business valuation methodology is crucial to the conclusion of value.
Welcome back to another episode of Litigation SpeaksAs much as you want to help your clients get a lower or higher value, professional standards are not negotiable..
This is an easy way to discredit a business valuation expertSome experts aren’t applying the standards in their valuations. The reason this is an important issue is that if the business valuation expert cannot be trusted to follow their Professional Standards by not using the proper language to describe the conclusion of their work product, how can they be trusted that they have not violated other sections of their Professional Standards
It’s beneficial for the client in all business valuations to share information with both sides of the case. Not sharing information potentially leads to having to make incorrect assumptions and weaker analysis to arrive at a conclusion of value.
The ABAR Concept of Creditability is grounded on consideration of inclusion of all known facts and circumstances (the good, the bad and the ugly ones) in the business valuation report. “Creditability” can be defined by seven basis processes, applied throughout the assignment. “Creditability is defined as “Worthy of belief”.
Preparing a business valuation report is very complex and time consuming. Understanding how to implement both the art and science takes years of experience and is critical for the business valuator and the reader of the report. All these factors play into the price but there is more that you may not know of.... Tune in and find out!
Welcome to 2023!This week's episode I will be discussing the different factors of the art and science that impact a conclusion of value in a report.Although its not your ideal piece of "art" the technique and experience is what I consider to be art in a valuation.Even though we aren't mixing chemicals business valuations has its own science which would be the professional standards and the recognized text books that interpret those standards.
Do you really understand a valuation report?This week's episode I will be elaborating why you cant use a the same valuation for two different purposes.
Have you ever wondered why a business valuation takes so long?On this week’s episode I discuss the high level issues on why a biz val is so time consuming. Two major areas that expands the length of time, they are professional standards and the clients records. The condition of the client’s records is one of the primary drivers of the time and cost. Tune into this week’s episode to learn more on this and stick around for the next one where I break down the cost of business valuation.
Don't overpay your estate tax... Small mistakes can lead to severe consequences. In my 30+ years of work in this field I constantly see reports where the valuation analyst have lacked due professional care that could cost the client hundreds and thousands of dollars or more.
Depreciation expense cannot be greater that the cost of an asset.... if it is there is too much depreciation expense which will lower the value of the company. For this episode I will be discussing the fallacy when doing a business valuation the capital expenditures and depreciation expense should not be exceed the capital expenditures in the terminal year.
Not all financial data that is used for making forecast or projections has predictive ability. The incorrect use of data could have a devastating impact on the conclusions relied upon by an expert. Do you know how to determine if the data has any predictive ability? If you don’t know how don’t worry I’ve got you covered on this week’s podcast!
Bias comes in many forms. If the expert produces a lower value intentionally or unintentionally it can be done through a capitalization rate. On the other hand an unintentional error can be made through a simple math error. Tune into this week’s episode to be able to identify this error.
Welcome to another episode of Litigation Speaks! This week, I am discussing (a business valuation report that has used a weighted average of the market, income and asset approaches). In my opinion the analysis was inaccurate and indicates bias by determining an artificially low value.
Welcome back! On this week's episode I will be discussing Misapplication of Forecasted/Projected Revenues and Operating Income which is a common mistake that is overlooked in many business valuation reports. Tune in to this episode to learn the importance of through investigation.
Welcome to another episode of litigation speaks! This week I will discuss the foundation of forecasting revenues and operating expenses for a business valuation and detecting bias in the work product. Attorneys need to better informed of what is expected from the valuation expert when they perform a business valuation and be better able to detect bias or deliberate misrepresentation.
Welcome back! This week I will be discussing the foundation of all business valuations and provide a roadmap of the due diligence expected from business valuation experts.
Welcome back! The topic of discussion is "Selecting Market Multiples" which is the base of all business valuations and provides a roadmap of the due diligence expected from business valuation experts. As the attorney you should know what is expected from the expert when they perform a valuation.
Welcome to another episode of litigation speaks This week I will be discussing the misapplication of comparing normalized or adjusted financial data to historical data to determine financial performance. Why? This is very critical information that Attorneys need to better educated in to detect anomalies created by inexperienced valuation experts that influence a valuation outcome.
This week I will be discussing financial benchmarking and the strengths and weaknesses in report analysis. You as the attorney need to understand and detect the deficiencies in business valuation reports. The better informed you are the better the outcome of your case.
Have you ever wondered how to know if a potential expert is reliable and will give you quality work? Tune into this episode and I will tell you exactly how!
Welcome to a very special episode of Litigation Speaks! Many don’t know I am a Vietnam Veteran. As memorial day approaches I thought I would share with you my story and what I did during my time in Vietnam. It’s a longer episode but full of memories and interesting stories. Tune in and I hope you enjoy. Happy Memorial Day weekend!
This week I will be discussing the foundation of all reliance on real and personal property appraisals used in a business valuation. Not following the appraisal procedures produces a invalid result..
This week I will be discussing the misapplication of the excess earnings method and what to look for to detect the misapplication. Did you know when using RR 68-609 the most common mistake is using the final year historical vs. an averaging mythology? In this week’s episode you learn how to apply my tricks in your cases.
This week I will be discussing the weakness of the Rule of Thumb pricing multiple and how the attorney can attack the method. This will educated the attorney on recognizing when the expert hasn't performed sufficient due diligence to determine the value of the company.
This will I will be discussing the foundation of all business valuations and provides a roadmap of the due diligence expected from business valuation experts.
On this weeks episode I will be discussing pricing multiples that are typically used with earnings before interest taxes depreciation and amortization. All these topics are details that can make or break your case....
On this week's episode I will be discussing the appropriateness to determine the value of a company using net income or cash flow. If you are not aware of this error the expert could be disqualified.
Forecasting or projecting is very judgmental and needs something to compliment that judgment the technique discussed will provide guidance so the attorney knows the reliability of that judgment.
Tune in to this week's episode to learn all about how not doing change in net work capital can make a significant change in the value of the company..
I hope you enjoy this weeks episode where I will educate you on incorrect terminal value calculations and the significant impact it has on the value of the company. This is valuable information to you because it can prevent you from settling on an incorrect value that can be too high or too low to the determine of your client.
Welcome to 2022! I hope you had a great holiday season I'm glad to be back with a new episode this week. For this episode I will be discussing the fallacy that when doing a business valuation the capital expenditures and depreciation expense are equal in the terminal year. I hope you enjoy Read my blog: https://www.biz-valuation.com/articles/ Visit my website : https://www.biz-valuation.com/
On this week's episode I will be discussing normalizing entries and how they can have a significant impact on the company, if not adequately performed the company may be significantly over or undervalued.
On this episode I will be continuing our conversation on W.A.C.C (Weighted Average Cost of Capital). I tell you what goes on behind the scenes that you would of not known about. This is an easy way for a valuation expert to manipulate the data and could be either advantageous or detrimental to your case.
On this weeks episode I will be discussing the beta and when it is not handled properly the discount/ capitalization rate will be incorrect this will have an impact on the value of the company. Stay tuned for the following episodes of this series.
In this episode I will be going over how easy it is to manipulate the presentation of financial information on a chart
In this episode we will be discussing the order of magnitude in determining the value of a company. Hope you enjoy and thank you for listening!
Hello welcome to my podcast! I hope you enjoyed my first episode on how to manipulate business valuations. We will discuss how experts do not use reliable principles and methods.