BVX Knowledge Base
BVX Knowledge Base
M&A University

Fixed Assets @ Book Value

See Inputs and Balance Sheet for general instructions.


Enter Book Value of the fixed assets that are required to generate the EBITDA. Book Value is the cost basis of the fixed assets on Seller's tax return. It is equal to the gross book value less accumulated depreciation. It is often listed on the balance sheet as Net Fixed Assets. (Note: The book value on seller?s financial statements is often different, generally higher, than that on the tax returns. Enter the cost basis of the fixed assets i.e. their value on the tax return, not their value on the financial statements.)


Amount entered in this cell as Book Value is used only for Stock purchase valuation. It does not affect Asset purchase valuation.


BVX depreciates Book Value of the fixed assets in a Stock purchase, on a straight-line basis, over a period of years entered in Miscellaneous: Old Fixed
Assets Write-off or at a rate specified in Internal Settings


Real Estate: This comment applies to situations where the business or the company owns the real estate used in the business. In such situations, BVX recommends that the business and the real estate should be valued separately, and the then the two valuations should be combined for total value of the business. To value the business w/o the real estate:

1) reduce the EBITDA of the business as if the business is paying a fair market rent for the real estate, and

2) enter the Book Value (i.e. the cost basis) of the fixed assets excluding the real estate.

Also, see EBITDA and Less Rent if not deducted.