No matter how detailed the data, the dollar worth of a given business eludes even the experts. A modest (one floppy disk) software package named Exchequer I (requires IBM compatible; Resource Valuations, Vancouver, Wash., 206-695-0424; $99) gives it a noble if simplified try and does a neater job than more complicated -- and more expensive -- financial-analysis packages.
To find a valuation approach that feels right for your company, you input the company's operating and balance-sheet history for as many as 13 previous years. From that, Exche-quer I computes standard components of gross value such as future earnings and future cash flow. How it combines them with particular line items and industry assumptions is your call. The resultant valuation models cover the usual esoterica: book value adjusted to fair market, capitalized earnings, return on net equity, discounted cash flow, excess earnings on sales, and so forth.
Because of the necessarily generic nature of the formulas, it's unlikely that sticklers like the IRS will accept the program's conclusion about dollar worth. Nonetheless, the ballpark figure is illuminating, if only because having to come up with the required financial details to produce it constitutes a practical lesson in why it's imperative to keep accurate and useful accounts. -- Robert A. Mamis