Business Valuation in Divorce.

FYI-Flint Divorce Bankruptcy Attorney Terry R. Bankert 235-1970, www.attorneybankert.com  asks DID YOU KNOW?.From Creative Tax and Financial Tips for the Low Asset/Underwater Case By Mary V. Ade, Stout Risius Ross, Southfieldningham JD CPA PC Troy

Closely Held Businesses at the Low Point
A. Business Valuation Issues

1. Quantifying RiskEvery company is susceptible to two types of risk. These two types are systematic risk (or market risk) and non-systematic risk (or company, industry specific risk). The volatility observed in the market as a whole over the past few years has created a need to diligently separate these risksPut another way, every company is susceptible to market risk, but some are more susceptible than others. For example, the “mom and pop” hardware down the street and Home Depot are certainly both susceptible to the risk associated with the economy as a whole. However, it is easy to see how the “mom and pop” hardware is affected to a different extent.Additionally, the current economic environment has created an environment in which it is increasingly hard to identify company specific risks. Every business owner has a different story about how the recession affected their particular company.
• Every business owner has a story to support why the year of their divorce will be the worst year in the company’s history. Now, due to the uncertain economy, some of the stories are more believable.
• This stresses the importance of doing your “due diligence”, to separate the true from the alleged. The fact that many businesses are struggling does not strictly imply that every business is doing poorly.