North County San Diego Family Law Blog

Business Valuation During A Divorce

The “valuation” of the marital interest in a closely-held business or professional practice is one of the central keys to a divorce that involves business ownership. What is the genuine value of the ownership interest in the business?  How do you work through the fog of half-truths and strategies designed to minimize that value to protect interests of the business owner?

While there are many methods used to establish the “valuation” of an ownership interest, the two most common are:

  • “Appraised Value if the Interest Was Sold”
  • “Earnings Multiplier”

At the Law Offices of Andrew Johnson we have extensive experience in business related divorces and the valuation of the marital interest in a business or professional practice. We work with proven experts who can determine an accurate appraised value for the business interest.  The “Earnings Multiplier” method multiplies the amount of gross sales or receipts by an “earnings multiplier” to determine the actual value of the business interest. The key in these transactions is to ensure that our forensic accountants validate the books, ensuring that reported sales or gross receipts are accurate and complete. The amount of the earnings multiplier is different for various industries, and our experienced attorneys work to ensure that the appropriate earnings documentation and multipliers are employed in your case.

If you are considering a divorce in North County San Diego and are concerned about the valuation of a business interest or professional practice, call (760) 639-0187. Learn about the importance of working with a Certified Family Law Specialist, and the difference we can make on the successful outcome of your case.