Business Valuation of Branson Trucking Company Essay

1357 Words Jun 4th, 2015 6 Pages
Case 21
Business Valuation of Branson Trucking Company

Prepared by
Maria Fernanda Chirinos

for Professor C.E. Reese in partial fulfillment of the requirements for
ACC 541- FORENSIC ACCOUNTING

School of Business/ Graduate Studies
St. Thomas University
Miami Gardens, Fla.
Term A1/Spring, 2015
May 22, 2015

Table of Contents
Issues…………………………………………………………..............................................……. 1
Facts…………………………………………………………..............................................…….. 1
Analysis/ Authority………………………………………………................................................. 3
Conclusions/ Recommendation………………………………............................................……...5
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In the late 1990s, two of the Branson brothers wanted to bring their children and their spouses into the business. The role that these new family members would play in the business created discussions and some altercations. Dave James in particular was opposed to bringing in family members. Dave threatened to leave, and some of the Bransons thought that was a good idea. After few months of negotiations, it was agreed that Dave James would receive one year’s severance pay, and the three Branson brothers would buy his stock in the company at its fair value. Dave James resigned from the trucking company at the end of 2011. Branson Trucking Company does not trade in any market, and it is a closely held. The only stock sales have been directly from the company to the original holders of the stock.

The Branson Trucking Company financial statements are prepared by the Black & Blue CPA Group directly from Branson’s accounting data. This accounting firm also prepares all of the Branson Trucking Company’s tax returns. The financial statements are prepared directly from Branson Trucking’s accounting data and are not audited by any accounting firm. Dave James received severance pay of $125,000. He is currently employed in a similar marketing position earning $135,000 a year. During the 2011-2007 time period, the average price earnings ratio for similar trucking firms that were traded in open markers were 9,

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