If you're looking to sell a piece of your company or, perhaps, simply to take on some additional debt, one of the first things you'll need to examine is what the business is worth. Most of the books on the subject treat the various approaches to valuation comprehensively enough, but they fall far short in providing a convincing picture of how the methods are applied in real situations. But Thomas J. Martin, a former investment banker and a frequent expert witness in valuation lawsuits, recently published as clear and realistic a guide to how valuation works as any we've seen.

Martin's 32-page report, Valuation ($19, the Business Owner, 516-681-2112), offers a solid overview of the basics and is sprinkled with Internal Revenue Service guidelines and other tips. In addition to reviewing why and when to value a business, Martin presents the standard approaches to valuing a closely held business. (He lays out seven.) And he describes how they can be appropriately blended with one another to arrive at a meaningful value.

By far the most interesting parts of the booklet are the five case studies, which take you through how actual (though disguised) businesses were valued. Whether Martin is discussing a valuation based on cash flow or how to adjust a financial statement, you learn that valuation is a complex business -- but also something that no savvy company owner can afford to ignore. -- Bruce G. Posner

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