Ready, Set, Go – The Process of Valuation

While we do need the financial statements of your business there are many steps that we follow and many questions we ask before you receive your valuation report.  It is like going on vacation. You want to lay on the beach in a tropical destination but there are several steps you need to do before getting to your tropical paradise.

We outline below the six important steps of having your business valued with Davis Martindale Advisory Services and your involvement in each step.

1. Engagement letter and preliminary requests
2. Follow up questions
3. Draft
4. Representation Letter
5. Invoice
6. Final Report

1 – Engagement Letter and Preliminary Requests

You’ve booked your flight and packed your bags.

Our engagement letter sets out the nature of the assignment, the purpose, our indemnity, terms and conditions, timing of the engagement, and fees.  Before we can proceed with the valuation you must sign the engagement letter and pay our retainer.  We ask you to sign the engagement letter at the start of the process to ensure all parties understand what we have been asked to prepare for you.

The timing of issuing our report is dependent on when we receive the preliminary information requests from you.  Our preliminary information requests may seem lengthy (i.e. our list of requests tend to be approximately 30 to 40 questions) but the information you provide us is imperative in understanding your business, corroborating facts on your business and ensuring we have all information necessary to complete the valuation.  While this volume of information requested may seem tedious, we do appreciate the time and effort you take to give us the information we need.  Packing your bags can often feel monotonous, but you will thank yourself when you are on the beach and you packed your sunscreen.

2 – Follow up questions

You’ve arrived at the airport and gone have through security.

After we have received the signed engagement letter and responses to all our preliminary requests, we will begin preparing the draft report.

When preparing the draft report and reviewing the information you have provided, there may be additional questions.  We do our best to ensure all our follow up questions are sent to you in one follow up request but sometimes we have more than one.   We are happy to have our questions answered through email, but if you have any questions about our questions, you can always give us a call.

3 – Draft

You’ve answered our preliminary requests and you’ve answered all our follow up questions and now you are waiting while we prepare the draft valuation report for you. You can sit back and relax while we take you to your final destination.

When we issue the draft report to you, we expect you to read it in full and anticipate you may have questions or comments and look forward to hearing from you.

4 – Representation Letter

You’ve landed; you are almost there!

You’ve received our draft report, but in our correspondence to you we’ve asked you sign the representation letter and pay our invoice before we will give you the final report.  Didn’t you already sign something at the start of the process?

The representation letter is different than the engagement letter. It is signed at the end of the process and confirms that we have relied on information provided by you and discussions with you; that you are not aware of any errors, omissions, or misrepresentation of facts which may have a significant impact on our report; and that no events have occurred and no facts have been discovered to the date of the representation letter which would have a material effect on the conclusion in our report.

The representation letter will always be sent with the draft report and must be signed and returned to us before we can issue the final report.

5 – Invoice

You’ve picked up your luggage at the carousel and are ready to go.

You’ve read our draft report and have sent us the signed representation letter but the final step is payment.  We may have asked to you to pay a retainer before starting the work.  The retainer request would be sent with the engagement letter and preliminary requests. The final invoice (net of any retainer paid) would be sent with the draft or soon following the release of the draft.  Once payment is received (and the representation letter is signed) we release the final report.

6 – Final Report

You have finally made it to your final destination.

You have answered all our questions, signed our engagement and representation letters, and no accounts are outstanding.  You can put your feet up and relax as now we can issue our final report.

Give us a call and we will get your report to its final destination.