Principles of Private Firm Valuation

156

TABLE 9.1

Balance Sheet for the Dr. Green Division of DDS

Fair Market

Fair Market

Fair Market

Fair Market Value

Value of

Value of Asset

Value of

of Components of

Asset

Components

Components of

Liabilities

Components

as of

Liabilities

Liabilities

+

Net Worth

at Acquisition

March 31,

+

Net

+

Net Worth at

as of

Assets

Date

2002

Worth

Acquisition Date

March 31, 2002

Current assets

$100,000

$100,000

Short-term debt

$100,000

$50,000

Net plant

350,000

$300,000

Other current

liabilities

$100,000

$100,000

Net equipment

$250,000

$250,000

Long-term debt

$400,000

$400,000

Intangible asset:

Equity value

Customer excluding

list

$200,000

$150,000

goodwill

$300,000

$250,000

Total

Total liabilities

identifiable assets

$900,000

$800,000

+ net worth

$900,000

$800,000

Goodwill

$100,000

$100,000

Goodwill

$100,000

$100,000

Total value of

Total liabilities

operating unit

$1,000,000

$900,000

+ net worth

$1,000,000

$900,000