As Graphic Arts Specialists, we take the utmost care to provide accurate valuations of your assets. Our credibility is paramount and our report will reflect well on your own professionalism and business acumen.
There are several ways to estimate the value of your machinery, equipment, furniture and fixtures. When we prepare an appraisal, we carefully define the method we have used.
Replacement Value represents the selling price a dealer would require to deliver and install a similar item in your plant. This selling price would typically include a warranty and whatever technical support a purchaser might reasonably require.
We use the term Current Market Value to indicate what we believe the asset would yield if exposed to the marketplace for an extended period of time. Such a selling price would not include delivery, installation, or technical support. The warranty would be limited to a short period in which the purchaser could satisfy himself that the asset is in good working order.
Fair Market Value is our way of expressing our estimate of what the asset is worth in its present condition and location.
Liquidation Value is what we expect the selling price of the asset will be if offered for sale by way of Public Auction, or by Private Sale for a relatively short period of time.
The use to which an appraisal is put determines what method or methods we use. The most common situation calling for an appraisal is when a business is seeking to obtain a loan from a financial institution. The lender will require Liquidation Values. However, we often are requested to provide Current Market Values as well. An experienced lender will recognize that there is a useful relationship between the two methods. For example, there will be a large gap between Market and Liquidation Values for a high-end offset press. The lender may well finance such a press for a customer in a good financial position, but he will want to know in advance that this asset cannot be sold quickly. On the other hand, a cutter holds its value quite well and therefore there is a smaller gap between the two values. The lender might be more willing to finance a cutter for a newer business or with a smaller down payment if he has that information.
Fair Market Values are required in cases involving estate planning, partnership agreements (or most likely disagreements) and other non-arm?s length transactions. In such cases, we must estimate what it would cost to acquire the assets if the purchaser were starting from scratch. We would then allow a bit more for the fact the purchaser is spared the inconvenience of doing so. In other words, Fair Market Value would generally be higher than Current Market Value.
We are seldom requested to provide Replacement Value in an appraisal. It is typically of interest to the business' insurers. Insurance companies are rather skilled in determining accurate Replacement Value and usually do not require our specialized knowledge.
Regardless of which method is appropriate in the circumstances, the appraiser should show that he has considered all relevant factors when preparing his estimates. We sometimes see appraisals of presses in which the dampening system, the impression count or the serial number is not indicated. Any knowledgeable reader will wonder if the appraiser was in possession of this necessary information if it is not stated.
Our fee for an appraisal is obviously based on the number of items to be evaluated, but also on the nature of the assets. If the plant contains relatively common items that we and others have frequently sold, the appraisal will be less time-consuming than one containing a number of specialized items. When you inquire about an appraisal, we will ask you for a brief description of your major items and the size of your plant. We can usually provide a firm quote for the report. We would be pleased to discuss your requirements and how we might meet them. Please call (416) 487-1802 or e-mail us at info @ graphic-auction.com.