agency value n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
AGENCY VALUE PowerPoint Presentation
Download Presentation
AGENCY VALUE

Loading in 2 Seconds...

play fullscreen
1 / 24

AGENCY VALUE - PowerPoint PPT Presentation


  • 107 Views
  • Uploaded on

AGENCY VALUE. Independent Insurance Agents & Brokers of SC 114th Annual Convention – Savannah, GA Jon Persky, CPA, CIC, PHR. Do You Have a Perpetuation Plan?. When to Retire?. Average Life Expectancy 75 years Time Sleeping - 25 years 50 years Your Youth - 20 years

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'AGENCY VALUE' - purity


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
agency value

AGENCY VALUE

Independent Insurance Agents & Brokers of SC

114th Annual Convention – Savannah, GA

Jon Persky, CPA, CIC, PHR

tick tick tick

Average Life Expectancy 75 years

Time Sleeping -25 years

50 years

Your Youth -20 years

30 years

Time Working -15 years

15 years

Infirm / late aging -10 years

5 years

Time driving, cooking, lines -3 years

Days left to do something fun 730

1

Tick, tick, tick…
methods of valuation

Present Value of Future Earnings Revenue Stream

  • Return on Investment (ROI)
  • Multiple of Earnings (EBITDA)
    • NOT Revenues!!!

4

Methods of Valuation
key issues

Value of any business is its future earnings power.

Value can only be determined by a pro-forma estimate of its continued earnings power under the circumstances.

Remove or change any conditions (owners, location, growth, profitability) and the value changes accordingly.

5

Key Issues
present value of future earnings

Five years of pro-forma earnings under stable operations. Discount for the value and risk factors derived from the past profit picture, balance sheet review, and inherent risks within the business.

Value is reduced by a working capital requirement (based on the most recent operating year).

Tangible Hard Net Worth of the business is adjusted to eliminate assets those that have no tangible value. This Hard Net Worth is added (subtracted) to the value.

6

Present Value of Future Earnings
return on investment

1. Values the business through a formula that determines the time necessary to recoup a capital investment through an accumulation of earned surplus according to pro-forma earnings projections.

2. Value is reduced by a 30-day working capital requirement.

3. Tangible Net Worth of the business is adjusted to eliminate intangible assets. This is added (subtracted) to the value.

7

Return on Investment
risk factors1

Level of active participation of owners in sales.

Level of active participation of owners in service.

Age of owners.

Are retiring owners the decision makers?

Age and experience of staff.

Sales staff.

Marketing.

Number of critical accounts.

Collections.

9

Risk Factors