15/06/2022 - CruseBurke

Buying or Selling a Business: Book Value Vs Market Value

Chris15/06/2022Business , Business Growth Ideas

In the corporate world, where people sometimes want to sell their business at a much higher price to earn a handsome profit. Similarly, other businessmen and investors wish to invest in the already established businesses. They can come across terms like book value vs. market value. Now, the question arises of how the sellers can estimate the worth of their business to get a fair price of their business. Besides, the buyers would like to buy a business at a fair market value. For this reason, many valuation methods and techniques are used by business consultants and advisors. However, each type of tool and method differ from each other considerably, giving a different value of the business valuation. As a result, the sellers and the buyers become confused and they become hesitant in making a crucial decision. In this blog, we will walk you through the two most common methods of business valuation before selling or buying a business. Moreover, we will discuss the difference between these two important terms. So, let’s begin! If you are struggling to calculate the worth of your business, get instant help from the professional accountants at the CruseBurke. Contact us now! What is Book Value And How To Calculate it? While selling a business, the seller would like to know the actual worth of his business before making a lucrative selling pitch. So, the business owners would hire expert business consultants to estimate the actual business value or worth of their business. If a company is publicly limited and listed on a stock exchange, the book value refers to the total amount all shareholders will get when the company will be liquidated. Book value is the most important measure to analyse the value of all the assets by subtracting the liabilities from them. The remainder value is the actual worth or the book value of a business. It is calculated as: Book Value = Total Assets – Total Liabilities What is the Market Value and Why is it Important? Market value, also known as the fair market value, is the amount or value of all the outstanding shares and the market price of a stock. When market value is much lower than the book value, it leads to the conclusion that a company is not representing the true value and worth and gives false information about the company’s books. The value investors usually prefer this type of situation where the market value is less than the book value and they expect the earning power or potential of a company to increase in the upcoming years due to the various factors. It means to say a sound investment decision relies on many factors. Book value and market value is the most widely used method for analysing the stock value or company value. On the contrary, a higher market value than the book value means the company is showing the appreciated value of the company stocks and books. Determining a fair market is crucial for analysing the true worth of a business and reaching a fair deal. Investors looking to invest in a publicly-traded company also analyse book value and the market value to make a decision if the company is worth their investment or not. Here is a formula for calculating the market value of a company: Market value = Price of a stock * Total number of outstanding shares Market value is also known as market capitalization and comparing these values helps investors to know if the stock is undervalued or overvalued. Difference between Book Value Vs. Market value As discussed above, the discrepancy between book value vs. market value reflects the confidence of the investors in the future earning potential of a company. A book value measures the total value of the assets of a company after deducting all the liabilities on the balance sheet. In other words, it is the value all shareholders will receive when the company is liquidated. On the other hand, the market value is the price of the stock and the total number is outstanding shares. When these two numbers are multiplied, the investor will get the market capitalisation of a company. It is the amount that will be distributed among the shareholders in financial markets. Conclusion In sum, the book value and market value are important to know the overall financial health and performance of a company. Comparing book value vs. market value is crucial as it reflects the risks and challenges associated with the books of a company. Sometimes, book values and market values of a company differ from each other considerably, indicating the red flags and investors can decide if they should buy or invest in this company. Want to sell or buy your business in the UK? Get adequate business valuation services at the CruseBurke. Get instant help now! Disclaimer: All the information provided in this article of Book Value Vs. Market Value is general in nature. It does not intend to disregard any of the professional advice

How Do I Claim Motor Expenses – A Guide For Self-employed Individuals!

George15/06/2022Accounting , Bookkeeping , Motor Vehicle

In case you are running a business as a self-employed individual and you own a vehicle, the vehicle is also used for business purposes, the chances are that your motor expenses can be claimed. This is to handle well in order to reduce your tax bills. However, to pursue the dream of reducing your tax bills, you have to learn to claim mileage for work first. It is considered a bit complicated to claim for your motor expenses in comparison to other business expenses. The reason behind this complexity is that most likely your vehicle is being used for business purposes as well as for your personal use. This makes it hard for you to collect the receipts in an official way to submit and get them approved. This will also hinder setting the receipts off against your business profits. This guide has covered you and we have explained how can you claim your motor expenses and how can you make a record of your business mileage. Are you self-employed and want to have another business in the United Kingdom? Whether you’re managing one business or juggling multiple ventures, make sure you’re registered the right way. It’s easy and quick to Register as Self-Employed with CruseBurke. How To Claim Motor Expenses? Normally there are two ways considered when it comes to claiming your motor expenses. They are listed below: The vehicle is used for business purposes. Calculate the usage and make a claim. Calculate your business mileage and make a claim for it. In the opinion of the experts, calculating the business mileage and making a claim is found to be an easier and simpler method for several people. However, it is hard to keep track of its record. It is recommended to keep a record both ways for beginners or first-timers. This will help you to choose the method you find the most convenient. Business Usage and Travel It is not right to consider every mile that you have travelled for business purposes as a business mile. In case you are driving to your regular places for work then this will not come in the count of business travel. This will be considered your own commute. The regular places must be excluded from your business percentage. One such example is the retail unit or office that you use to work. Even when you pay a visit to your contractor or the office for whom you work as a freelancer is excluded from the list. Let’s talk about what is classed as business usage. When you travel for a meeting with your client, it is classed as a business mile. Some other examples include the following: When you travel to some temporary place for the purpose of work. When you travel to attend training or courses in business. When you travel to buy stocks. You will realise that when you exclude the commute miles from your total miles, there are very few moles left that you travelled for business purposes. Learn to Record Mileage for Work If you aim to use the method of calculating mileage to make a claim on motor expenses, it is recommended to maintain a mileage log for this cause. This will help you to make a claim. If someone asks you for the relevant details like HMRC requires, you can easily provide the details. The method you want to choose for the record of your business mileage is totally your choice. There are several simple methods and steps to maintain the records. This includes the following: A manual log to keep all the details of your journeys recorded. Record the postcodes. The distance between the postcodes is also recommended to be recorded. There are certain apps that can help you maintain the record if you are more like a tech-savvy person. Use the GPS of your mobile phone to keep an easy track of your business journeys. Claim Business Usage of Your Vehicle The famous and simple method to keep a record of the business mileage is to consider the overall business usage of your vehicle. For this method, you will have to calculate the overall mileage and then the business mileage of your car. This method is considered a bit complicated. The business will tend to pay for all the motor expenses including: Repairs and services Tax Insurance Petrol Moreover, this depends on your choice of whether you want to enter the full amount of expenses of the vehicle or just the business expenses. For this processing, you need to clearly understand the difference between allowable expenses and disallowable expenses. There is no escape from personal usage and expenses as you will only get tax relief on the business expenses. Do you want to know more about your business usage of a car? We can help you in this matter. Get in touch and enjoy instant help now. Talk to our guys today! The Bottom Line We can sum up the discussion as you have gathered a fair amount of information about how to claim mileage for work. It is suggested that you make notes about the method and details that explain how you chose the business percentage. These details can be required by HMRC or anyone related to the industry. This can be reviewed annually as well to ensure seamless processing and an accurate business percentage. We hope this guide will help you to choose the suitable method and make accurate calculations to make a claim. Disclaimer: The information about how to claim mileage for work provided in this blog is general in nature. It does not intend to disregard any of the professional advice.

A Guide Based On Ways to Improve Your Budgeting!

George15/06/2022Accounting , Accounting Issues

The budgeting process has a great influence on a business and it can help a company to take off swiftly if it is done in a right and professional manner. Here in this article, we have got you covered with everything that you need to know about the ways to improve your budgeting. Ways to Improve Your Budgeting There are several ways that can help you to improve your budgeting process. However, we have listed the top ten that are in the limelight and have proven the best so far. These include the following listed ones and are explained below as well: Budgeting Development and Amount of Time you Spend Reduce The Number of Iterations Details In Budgeting Non-Financial Influences Budget Productivity Tools Planning and Analysis Balance Wise Division of Resources Better Performance Visibility Goals Of Budgeting Process Top-Down and Bottom-Up Approach Budgeting Development and Amount of Time You Spend If you are making your budget on an annual basis, here is a tip for you to make the process easier and quicker. You can move your budgeting process to a monthly or quarterly basis. This will be less time-consuming comparatively. You will find the process is more adaptable for you as well. Are you looking for instant help to make your budgeting skills quicker? Get in touch with one of our experts and find the best possible solutions to your budgeting problems. Reduce The Number of Iterations You will be needing fewer iterations if you make your budget cycle shorter smartly. You are not required to be a perfectionist about a budget that is based on the performances of the past. Details In Budgeting A simple way to make your budgeting skills successful is to add fewer items and details to the list of the budget. If your budget is focused too extra on the details rather than the what-if scenarios, the flexibility factor will be lost from the document and that is not considered very wise for the process. Non-Financial Influences Several businesses are observed to pay attention only to accounting in the process of budgeting. This hinders the presentation of the idea of how a business is actually running. There is a need for the planning structure of the business strategies in the document as well. Also, the reporting structure must be a part of the budget, otherwise, you will need to revisit your budget over and over again which will waste your time. Budget Productivity Tools Cloud-based tools can help to solve and adapt. This will also automate your budget as well as consolidate it in the same platform. Planning and Analysis Balance If you smartly shorten the planning time, you will get a chance to focus more on the analysis of your budget. This will improve your budgeting process. Wise Division of Resources This is important to realise that your resources are ensured to allocate in a way that is supporting your key strategies. Operating and capital budgets need to be coordinated and reviewed for this purpose. This will help you to identify how the changes in one budget can affect the other budget. This will further make your budgeting decisions smarter. Better Performance Visibility It is important to realise that your performance should not only be perfect but seen and visible as well. It is recommended to focus on a performance-based framework to make your performance more and more visible. Goals Of Budgeting Process It is important to make your budget in such a way that is easy to understand and the goal post is clearly depicted in it. This will help everyone to have an idea of what are they supposed to do or who are they going to report. This is an easy way to make the process more efficient. Top-Down and Bottom-Up Approach In case your budget is made in such a smart way that makes it realistic for the line management and support in terms of the goals and strategies, the chances are that you will have to make fewer revisions. Still, looking for more information about improving your budgeting skills? Why not try to speak to our professionals? Call us on 02086868876 or email us today. The Bottom Line Now that you have gathered a fair piece of information about ways to improve your budgeting, we can finally sum up the discussion. The budgeting skills can be improved by focusing less on adding too many details and more on the goals and strategies. This will help you to reduce too much time spent on the revisions. We hope these few minutes of reading will prove to be beneficial to improve your budgeting skills. Disclaimer: The information about ways to improve your budgeting provided in this blog is general in nature. It does not intend to disregard any of the professional advice.