Welcome to 2026!
We hope you and your team are off to a strong start for the New Year. As for us, we’re excited to introduce a new series here to our newsletter, and also to share with you some details about an advanced one-day Family Law conference held by Legalwise that we are sponsoring (details below).
Introducing our Newsletter Educational Series: Over the coming months, we’ll be exploring the main methodologies and approaches used in business valuations.
We are not setting out to educate on every aspect of valuation, because you can rely on us for that expertise. Rather, we wish to provide you with a birds-eye view of the valuation landscape. This foundational knowledge will complement the professional legal services you provide, equipping you with a framework to contextualise valuation findings as they relate to your cases.
Whether you’re dealing with Family Law matters, shareholder disputes or commercial litigation, understanding these key concepts will strengthen your professional repertoire.
Main Methods for Valuing a Business
The main method used to value an interest in a business depends on whether it is a publicly listed company or a private business operating as a sole tradership, partnership, trust or company structure.
Listed Public Company: Valuing shareholdings in listed entities is relatively straightforward. In most cases, the share price is determined with reference to the quoted market prices on the relevant stock exchange.
Private Businesses: Valuing interests in unlisted businesses is more complex. An important distinction is that when you are valuing an interest in a private company, you are valuing the shareholding in that company, and not the underlying assets themselves.
For private businesses, valuations generally fall into three broad categories:
Income based Methods: These methods focus on the earning capacity and cash flow of the business. Common approaches include discounted cash flow analysis and capitalisation of maintainable earnings.
Assets based Methods: These methods focus on the net value of the business’ underlying assets, valued either on a going concern basis or based on realisation of assets (liquidation value).
Market based Methods: These methods rely on comparable transactions or similar businesses to establish value, including comparative sales of similar businesses or industry-specific rule of thumb.
Choosing the Appropriate Valuation Method
The selection of the appropriate valuation method is driven by the specific circumstances of the business and the purpose of the valuation.
Key considerations may include the nature and stage of the business (Is it profitable, mature or in distress?), the availability and reliability of financial information, the relevant industry and the reason for the valuation.
As a brief preview, a profitable, established business is typically valued using income-based methods, whereas a company in financial distress may be more suited to an assets-based approach. Market based methods work well when there is sufficient comparable transaction data available.
Often one method will serve as the primary approach, but multiple methods may be applied often as a cross-check and as supporting evidence.
In the coming newsletters we’ll explore each of these approaches in more detail, including nuances to be aware of and what you should look for in a valuation report.
Family Law Conference: Property Matters, Skills and Ethics
Family Law practice has undergone major reform and case law development recently. Munday Wilkinson is proudly sponsoring an advanced one-day conference (Melbourne or online) where leading specialists will cover key updates including the reforms, Shinohara and the new Kennon provisions, as well as practical guidance on trusts, third-party interests and working with experts.
If you wish to strengthen your approach to ethics in property matters, third-party joinder, and how to manage high-conflict, trauma-impacted clients with confidence and care, you can read more and register here.
We’d Love to Connect This Year
Joshua, one of our Directors, is a well regarded presenter for Legalwise Australia and often conducts in-house presentations for law firms. Last month, he presented at Leo Cussen Centre of Law on the topic of “Essential Financial Literacy for Lawyers.”
If you or your colleagues would benefit from an in-depth discussion on valuation issues, we would love to arrange a coffee chat or a tailored presentation for your firm.
Please reach out and we can organise.
Our Accredited Specialists
Victoria Wheeler – Director with over 20 years’ experience in accounting, business services and taxation. She is recognised as a Forensic Accounting Specialist by CA ANZ and has appeared as an Expert Witness in the Federal Circuit Court of Australia and County Court of Victoria.
Joshua Wheeler – Director with over 17 years’ experience in commercial and professional accounting services. He has appeared as an Expert Witness in the County Court of Victoria, and has participated in conferences / mediations with legal representatives and other experts. He was a presenter at the inaugural SV Partners Accounting Forum, has presented with Legalwise Australia, and regularly presents to law firms on Business Valuations for Family Law matters.
Both Victoria and Joshua are recognised as Business Valuation Specialists by CA ANZ.
As always you can reach out at any time on (03) 9816 9122 or email us at advice@mwforensic.com.au.
Regards,
The MW Forensic Team
Disclaimer: Although every care has been taken in preparing “MW Insights”, no responsibility is accepted by Munday Wilkinson Pty Ltd for errors or omissions. Professional advice should be sought before applying the information to particular circumstances.
Liability limited by a scheme approved under Professional Standards Legislation
Munday Wilkinson, trading as MW Forensic, is a boutique business valuation and forensic accounting firm established in June 2000. We offer the legal profession, and others, a quality, personalised, time efficient and cost-effective service