tag:blogger.com,1999:blog-39366937258385654562024-02-20T08:54:22.759-08:00Money God, Money DevilFinancial news and information, including real estate markets, stock market updates, and economy news.Unknownnoreply@blogger.comBlogger9125tag:blogger.com,1999:blog-3936693725838565456.post-49367906933445295332011-03-22T14:47:00.000-07:002011-03-22T14:54:30.536-07:00How to Value a BusinessThere are various factors that come into play during the process of business valuation, including subjective interpretation, economic conditions and the reason for valuation. If the business is valued for sale, its worth depends on what's important to the buyer. One may believe the value is connected to its service to the community, while another may only consider income as the sole indicator of value. There are three fundamental approaches for determining the value of a business: asset, market and income.<br /><br /><div class="Section FLC"> <div style="font-weight: bold;" class="Title2">Asset Approach</div> <div class="SubSection FLC"> <p class="Title2">Step 1</p> <div> <p>Gather all business balance sheets to collect information regarding what assets have been purchased by the business. This should also include all assets that have been donated or transferred to the business, according to ValuAdder.</p> </div> </div> <div class="SubSection FLC"> <p class="Title2">Step 2</p> <div> <p>Collect all necessary information regarding any inventory that may have been created within the business.</p> </div> </div> <div class="SubSection FLC"> <p class="Title2">Step 3</p> <div> <p>Take into account any proprietary information owned by the business. This may include internally developed products and proprietary ways of doing business.</p> </div> </div> <div class="SubSection FLC"> <p class="Title2">Step 4</p> <div> <p>Choose appropriate methods to value each asset. A common method is to consider the amount the owner paid for the asset to determine value. However, many assets are not purchased by the business owner, such as internally developed products and proprietary business methods. Add the sum of all values. The resulting figure provides the total value of the business.</p> </div> </div> </div><br /><div class="Section FLC"> <div style="font-weight: bold;" class="Title2">Market Approach</div> <div class="SubSection FLC"> <p class="Title2">Step 1</p> <div> <p>Check advertisements for similar businesses for sale. Depending on the type of business, it may be relevant to confine the search to local advertisements. The businesses sampled should be similar in size and scope. The more refined the criteria used for sampling, the more accurate the business valuation will be.</p> </div> </div> <div class="SubSection FLC"> <p class="Title2">Step 2</p> <div> <p>Record the selling price of each advertised business.</p> </div> </div> <div class="SubSection FLC"> <p class="Title2">Step 3</p> <div> <p>Calculate the sum of sampled businesses for sale. Divide this figure by the number of businesses sampled. This will provide the average price of similar businesses, which can be used as the fair market value of the business to be valued.</p> </div> </div> </div><br /><div class="Section FLC"> <div style="font-weight: bold;" class="Title2">Income Approach</div> <div class="SubSection FLC"> <p class="Title2">Step 1</p> <div> <p>Calculate the discount rate of the business by comparing the potential investment with other safer alternative investments, such as U.S. government bonds. The discount rate represents the required rate of return to make a business acquisition worth the invested amounted. If a business purchase is financed by both equity and debt, the discount rate can be calculated as a weighted average cost of capital.</p> </div> </div> <div class="SubSection FLC"> <p class="Title2">Step 2</p> <div> <p>Calculate the capitalization rate by subtracting the expected annual long-term growth rate from the discount rate. Capitalization rate is the rate of return on an investment based on expected income the investment will generate, according to Investopedia.</p> </div> </div> <div class="SubSection FLC"> <p class="Title2">Step 3</p> <div> <p>Divide the annual earnings of the business by the capitalization rate. This figure is the valuation of the business.</p><p><br /></p><p><span style="font-weight: bold;">Sources</span></p><p>ValuAdder: Business Valuation: Three Approaches to Measuring Business Worth [http://www.valuadder.com/valuationguide/business-valuation-three-approaches.html]<br /></p><p>ValuAdder: Capitalization Rate Definition[http://www.valuadder.com/glossary/capitalization-rate.html]<br /></p><p>ValuAdder: Weighted Average Cost of Capital (WACC) Definition [http://www.valuadder.com/glossary/weighted-average-cost-capital.html]<br /></p><p>Investopedia: Capitalization Rate Definintion [http://www.investopedia.com/terms/c/capitalizationrate.asp]<br /></p><p>ValuAdder: Discount Rate Definition [http://www.valuadder.com/glossary/discount-rate.html] </p><p><span style="font-weight: bold;"><br /></span></p> </div> </div> </div>Le Bach Phamhttp://www.blogger.com/profile/05898660475896856899noreply@blogger.com0tag:blogger.com,1999:blog-3936693725838565456.post-49846898699367416952011-03-15T11:47:00.000-07:002011-03-15T11:48:58.073-07:00How to Assume a Car Loan<p>If you do not have enough money to buy a used car outright, you may want to consider taking over somebody’s car payments. This requires that you legally assume the lease for the car. You would be responsible for making payments on the car for the time remaining on the lease. However, not every lease company will allow you to assume a loan. Additionally, your income and credit history may also play a role.</p><div class="SubSection FLC"> <p style="font-weight: bold;" class="Title2">Step 1</p> <div> <p>Have the vehicle owner contact his or her finance company to inform it that you are planning on taking over the remainder of the car loan agreement.</p> </div> </div> <div class="SubSection FLC"> <p style="font-weight: bold;" class="Title2">Step 2</p> <div> <p>Submit an application to the leasing company. Your income to debt ratio and credit report will play an important role in the company’s decision. If you are not immediately approved to assume the loan, then offer collateral in order to gain approval.</p> </div> </div> <div class="SubSection FLC"> <p style="font-weight: bold;" class="Title2">Step 3</p> <div> <p>Inspect the loan agreement and make sure you understand all of the conditions attached to the contract. If you understand and agree to all the terms listed in the contract, then sign the agreement. The entire process can take anywhere from several days to a few weeks depending upon the company.</p> </div> </div> <div class="SubSection FLC"> <p style="font-weight: bold;" class="Title2">Step 4</p> <div> <p>Begin making payments according to the loan agreement. You will be required to continue with the original schedule of payments. You may need to start making payments immediately after signing the loan agreement.</p><div class="Section FLC" id="Itemtips"> <div style="font-weight: bold;" class="Title2">Tips</div> <ul><li> Make sure you are comfortable with the monthly payment amount specified in the lease agreement. </li><li> It is always a good idea to consult an attorney or a personal finance professional if you have any questions. </li><li> If your credit is not acceptable to the loan company, then you may want to consider finding a co-signor. </li></ul> </div><p><br /></p> </div> </div><p><span style="font-weight: bold;">Sources</span></p><p>Loan.com: The Basics of Assuming a Car Loan [http://www.loan.com/car-loans/the-basics-of-assuming-a-car-loan.html] </p>Le Bach Phamhttp://www.blogger.com/profile/05898660475896856899noreply@blogger.com0tag:blogger.com,1999:blog-3936693725838565456.post-26090706129978625432011-01-29T19:16:00.000-08:002011-01-29T19:20:48.666-08:00Who Can Sign a Customs Power of Attorney?U.S. Customs has specific rules regarding who is allowed to sign a power of attorney. There are specific rules for incorporated companies and companies from Canada.<br /><br /><span style="font-weight: bold;">Incorporated Companies</span><br /><br />Without supporting “articles of incorporation,” the only titles allowed to sign for an incorporated company are the president, vice president, secretary or treasurer. This is true for most incorporated companies, however there are some exceptions for smaller <a href="http://www.suite101.com/content/the-corporate-business-structure-powers-and-purposes-a312071">corporations</a>, according to Livingston, which is a leading North American provider of customs brokerage and transportation.<br /><br /><span style="font-weight: bold;">Smaller Incorporated Companies</span><br /><br />U.S. Customs makes certain exceptions for who can sign the power of attorney for smaller <a href="http://www.suite101.com/content/the-corporate-business-structure-powers-and-purposes-a312071">corporations</a>. A person does not have to have the title of president, vice president, secretary or treasurer if that person is the sole signing officer, according to Livingston. This must be explicitly written on the power of attorney.<br /><br /><span style="font-weight: bold;">Canadian Companies</span><br /><br />There are special rules for Canadian companies wishing to pass through U.S. Customs. The officer signing for a Canadian company must complete a “certification by Canadian corporation.” This officer must be different from the officer who completed the power of attorney document, according to Livingston.<br /><br />Sources:<br /><br />Livingstonintl.com: U.S. Power Attorney FAQ [http://livingstonintl.com/shippingtousb.cfm?id=1453]Le Bach Phamhttp://www.blogger.com/profile/05898660475896856899noreply@blogger.com0tag:blogger.com,1999:blog-3936693725838565456.post-86855903917396734062011-01-07T19:21:00.000-08:002011-01-08T01:03:00.760-08:00Demand for Facebook Shares Overwhelms GoldmanGoldman Sach’s estimated acquisition of $1.5 billion in equity ownership in Facebook has excited many stock market investors.<span style=""> </span>Since the announcement, clients have stormed Goldman with orders for Facebook shares.<span style=""> </span>This is surprising since Goldman has only disclosed a small amount of information regarding Facebook’s online traffic to its investors, according to the <a href="http://online.wsj.com/article/SB10001424052748703675904576064210094944044.html">Wall Street Journal in an article titled “Goldman Flooded With Facebook Orders.”</a><span style=""> </span>Overwhelming demand has forced the investment <a href="http://www.suite101.com/content/the-corporate-business-structure-powers-and-purposes-a312071">corporation</a> to stop offering Facebook shares for sale. The SEC is currently debating whether to mandate that Facebook become a publicly traded corporation, which would mean it would have to issue <a href="http://www.suite101.com/content/the-difference-between-common-and-preferred-stock-a326061">common or preferred stock shares</a> into the public stock market.<span style=""> </span>Le Bach Phamhttp://www.blogger.com/profile/05898660475896856899noreply@blogger.com0tag:blogger.com,1999:blog-3936693725838565456.post-48273151073375827912011-01-01T17:09:00.000-08:002011-01-08T01:05:19.909-08:00Jobs and Real Estate Development Looking Up<style>@font-face { font-family: "Times New Roman"; }p.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: "Times New Roman"; }table.MsoNormalTable { font-size: 10pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; }</style> <p class="MsoNormal">The US economy shows sign of recovery and stability in the areas of jobs and real estate.<span style=""> </span>Jobless claims have dropped dramatically last week, according to the New York Times in an <a href="http://www.nytimes.com/2010/12/31/business/economy/31econ.html?ref=economy">article</a> titled “Jobless Claims are Lowest Since July 2008.”<span style=""> </span>Applications for unemployment benefits dropped by 34,000.<span style=""> </span>President Obama signed a new tax bill on December 16, 2010, which extended Federal unemployment benefits for another 13 months, reported MSNBC in an <a href="http://firstread.msnbc.msn.com/_news/2010/12/17/5670562-obama-signs-tax-cut-bill-into-law-">article</a> titled “Obama signs tax cut bill into law.”<br /><br /></p> <p class="MsoNormal"> </p> <p class="MsoNormal">Real estate development, despite the recent economic conditions, has continued to attract investment loans from banks.<span style=""> </span>Many large real estate development <a href="http://www.suite101.com/content/the-corporate-business-structure-powers-and-purposes-a312071">corporations</a> had suffered gigantic loses during the current recession, according to the New York Times in an <a href="http://www.nytimes.com/2011/01/02/realestate/02developers.html?ref=business">article</a> titled “For Real Estate Developers, Failures Hardly an Obstacle.”<span style=""> </span>However, these developers were still able to garner bank loans for further ventures, despite multi-billion dollar losses.<span style=""><br /></span></p><p class="MsoNormal"><span style=""><br /></span></p> <p class="MsoNormal"> </p> <p class="MsoNormal">Job market improvement and banks’ willingness to still invest in real estate development may lead to an overall economic recovery.<span style=""> </span></p>Le Bach Phamhttp://www.blogger.com/profile/05898660475896856899noreply@blogger.com0tag:blogger.com,1999:blog-3936693725838565456.post-33222329576509707062010-12-25T19:26:00.000-08:002010-12-25T19:28:12.887-08:00China Continues Fight Against Inflation on ChristmasChinese leaders have pledged to vigorously fight inflation of the Chinese currency.<span style=""> </span>On Christmas Day the Chinese government made good on its promise by raising interest rates, reported Bloomberg in an <a href="http://www.bloomberg.com/news/2010-12-25/china-raises-interest-rates-by-25-basis-points-in-bid-to-curb-inflation.html">article</a> titled “China Increases Rates to Curb Its Fastest Inflation in Two Years.”<span style=""> </span>In November, China’s inflation was 5.1 percent, which is the highest in 28 months.<span style=""> </span>China has already increased banks’ required reserve requirements six times this year in order to battle inflation, according to Reuters in an <a href="http://www.reuters.com/article/idUSTRE6BO09H20101225?pageNumber=2">article</a> titled “China fights inflation with Christmas rate rise.”Le Bach Phamhttp://www.blogger.com/profile/05898660475896856899noreply@blogger.com0tag:blogger.com,1999:blog-3936693725838565456.post-12501705515354925472010-12-20T16:05:00.000-08:002011-01-08T01:07:58.965-08:00Ernst & Young May Face LawsuitNew York accounting firm, Ernst & Young may face charges of misconduct in handling accounting records of Lehman Brothers, the investment bank at the center of the financial crisis. Ernst & Young certified the investment <a href="http://www.suite101.com/content/the-corporate-business-structure-powers-and-purposes-a312071">corporation</a>'s financial statements from 2001 through 2008, according to a New York Times article titled “Ernst & Young Faces Suit over Lehman” published on December 20, 2010. Regulators are preparing to file suit against the accounting <a href="http://www.suite101.com/content/the-corporate-business-structure-powers-and-purposes-a312071">corporation</a>.<span style=""> </span>This would be the first significant legal action related to the Lehman Brothers collapse.Le Bach Phamhttp://www.blogger.com/profile/05898660475896856899noreply@blogger.com0tag:blogger.com,1999:blog-3936693725838565456.post-18145026972252741922010-12-17T17:44:00.000-08:002011-01-08T01:09:48.810-08:00Estate Tax Eliminated, Budget Gaps WidenedThe estate tax continues nonexistence.<span style=""> </span>On Thursday when the Senate passed a bill extending tax cuts which virtually eliminates the estate tax for most individuals, according to the New York Times in an article titled “Estate Tax Will Dwindle Under Tax Cut Package” by Paul Sullivan, published on December 17, 2010.<span style=""> </span>The bill will extend tax cuts for the next two years.<br /><br /><span style=""> </span> <p class="MsoNormal"> </p> <p class="MsoNormal"><b>Federal Budgets Affected by Extended Tax Cuts</b></p> <p class="MsoNormal"><br /></p><p class="MsoNormal">The extended tax cuts may cause havoc upon the Federal budget, due to projected loss of tax revenue.<span style=""> </span>The bill is expected to cost the Federal government $858 billion over the next ten years, reported Ocala Business Journal in an article titled “Stearns supports tax plan that president signed” by Bill Thompson, published on December 17, 2010.<span style=""> </span>This will widen the already deep Federal budget gap. </p> <p class="MsoNormal"> </p> <p class="MsoNormal"><b><br /></b></p><p class="MsoNormal"><b>State Budgets Affected by Estate Tax Cuts</b></p> <p class="MsoNormal"><br /></p><p class="MsoNormal">The extended tax cuts will also have profound affects on some state budgets.<span style=""> </span>As a result of the extended estate tax cuts, California’s budget was revised to reflect an additional $2.1 billion deficit, according to Business Insider in an article titled “California’s Deficit Jumps to $28 Billion as Tax Deal Rips Away Vital Income” by Gus Lubin, published on December 9, 2010.<span style=""> </span>California’s budget shows a $28.1 billion gap over the next 18 months.<span style=""> </span></p> <p class="MsoNormal"> </p> <p class="MsoNormal"><b><br /></b></p><p class="MsoNormal"><b>Keeping Money in the Pockets</b></p> <p class="MsoNormal"><br /></p><p class="MsoNormal">For some the extended tax cuts will mean keeping money in their pockets.<span style=""> </span>The hope is that the increased capital in the hands of individuals will help stimulate the economy.<span style=""> </span>Economic indicators had recently showed small signs of recovery, according to an article on Seeking Alpha titled “Stocks, Led by Tech, See Slim Gains, But Europe Worries Weigh” published on December 17, 2010.<span style=""> </span>However, this will only stimulate the economy if people actually spend.</p> <p class="MsoNormal"><b> </b></p> <p class="MsoNormal">Despite signs of recovery, the large projected budget deficits and inflated currency is what began the economic collapse in the first place.<span style=""> </span>The estate tax cuts could cause the economy to head down an all too familiar path.<span style=""> </span>It would be difficult to reverse the damage once President Obama signs the bill, which would extend tax cuts for another two years.<span style=""> </span></p>Le Bach Phamhttp://www.blogger.com/profile/05898660475896856899noreply@blogger.com0tag:blogger.com,1999:blog-3936693725838565456.post-44614572453618940352010-12-16T22:08:00.001-08:002011-01-08T01:12:01.451-08:00Fed Action Causes Credit Card Stocks to FallCredit card company stock shares were hit hard by news of the Federal Reserve’s announcement that it will be proposing rules to cut credit card fees.<span style=""> </span>Analysts estimate credit card fees could be cut by as much as 90 percent, according to a New York Times article, titled “Fed Proposes Rules to Cut Debit Card Fees” by Eric Dash, published on December 16, 2010.<span style=""> </span>The proposed rules could limit interchange fees to 12 cents per credit card transaction or lower.<br /><br /><span style=""> </span> <p class="MsoNormal">As a result of Fed action, Visa stock shares fell by $9.75, which is a 12.7 percent drop on today, according to Market Watch in an article titled “Debit-card fee actions hit credit card companies” by John Spence, published on December 16, 2010.<span style=""> </span>MasterCard <a href="http://www.suite101.com/content/the-difference-between-common-and-preferred-stock-a326061">stock shares</a> also declined by more than 10 percent.<span style=""> </span>Discover Financial Services fell 3 percent in the stock market.<span style=""> </span></p>Le Bach Phamhttp://www.blogger.com/profile/05898660475896856899noreply@blogger.com0