Mark Peros

“I contacted Williamson Accounting because they were recommended for their expertise in bookkeeping and accounting services. They resolved issues that I had with past GST/HST filing and as a result we obtained a sizeable refund! The things I appreciated were their knowledge and experience; professionalism and their ability to keep us posted throughout the process. I would highly recommend Williamson Accounting to anyone in the market ranging from small business bookkeeping to complex tax audit issues with the Canada Revenue Agency.”

Mark Peros, President, Peros Inc. and CMFR Canada


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Williamson Accounting Inc. helping your small business to reduce taxes and simplify accounting in the Greater Toronto Area (GTA) and across Canada.

For a free initial conversation about your business, call (416) 444-8747 or Contact us.

How is a Company Valued?

Guess Article By: Douglas Craig, Chartered Business Valuator

I am frequently asked how a company is valued. Simply put, the value of a company is the value in today’s dollars of all the future benefits of ownership of the company.

For operating companies, the future benefit comes from the earnings and cash flow associated with the assets owned by the subject company. The earnings or cash flow that are maintainable in the future are measured and then capitalized using an appropriate capitalization rate.

Capitalizing means multiplying by the factor chosen. This capitalization rate or multiplier is essentially an assessment of the risk associated with the subject company and its ability to achieve the estimated earnings over time.

Generally speaking, the higher the risk, the lower the valuation multiplier and the lower the value of the company.

Risk is assessed both on external factors (i.e. those beyond control of management) and internal factors (i.e. those within the control of management).

For some other companies, the value comes more from assets themselves than from company’s earnings power. Examples are holding companies and real estate companies. For these companies, the assets are typically valued separately and the aggregate of the asset values forms the value of the company.

Since there are often disposition costs, including income taxes, in the realization of the value of these assets, the estimated disposition costs are deducted from the aggregate gross values of the assets in determining the value of the company.

For a company that is no longer viable as a going concern, its value is determined using a liquidation approach. This involves a determination of the value of assets that would be sold on a piecemeal basis.

The costs of closing down the company or business, including employee costs, are estimated and deducted from the liquidation value of the assets.

Douglas Craig, a Chartered Accountant and Chartered Business Valuator, is the founder and President of Equity Trends Inc. Doug has extensive experience in complex business valuations and succession planning, working with business owners, shareholders and family-run operations to maximize shareholder value. Doug can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it. or 416.432.0141. For further information on business valuations and Equity Trends Inc., go to www.equitytrends.ca.


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