Business valuation. The Branson Trucking Company was started by three brothers in Columbus, Ohio in 1977. In 1982, Dave James came into the company primarily for marketing and growth purposes. Soon Dave showed that he was effective at increasing business and making deals that caused the company to grow significantly. Within 10 years, Branson trucking was one of the major regional carriers in the central Midwest.

Over the years, the Branson brothers gave stock options to Dave James to keep him happy with the firm and to reflect his contributions to the firm's growth and general success. Dave exercised these options over time, and by 1995, the three Branson brothers and Dave James each owned 25 percent of the stock of the Branson Trucking Company.

By the late-1990s, two of the Branson brothers wanted to bring children and their spouses into the trucking business. The role that these new family members would play in the business created significant discussions and some strife. 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 several 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. At the end of 2007, Dave James resigned from the trucking company.
Branson Trucking Company is a closely held company that does not trade in any market. The only stock sales have been directly from the company to the original holders of the stock. Below are income statements for the Branson Trucking Company for the years 2003-2007. 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 2003-2007 time period, the average price earnings ratio for similar trucking firms that were traded in open markets were \(9,11,12,10\), and 8 , respectively, for the five year period. Branson Trucking Company's net income for the years 2008-2009 was \(\$ 450,000\) and \(\$ 690,000\), respectively, for the two year period. Below is an appraisal of the Branson Trucking Company's assets as of December 31, 2007. At that time the firm's total liabilities were \(\$ 5,100,000\).
You are hired as a forensic accounting expert. Prepare a business valuation for the Branson Trucking Company at the time that Dave James left the business. Determine what the shares of Dave James were worth at the time of his departure from the company. What limitations, if any, will you list in your report in connection with your valuation of this business? Would your valuation of the business or of the value of Dave James's share in the business change depending on whether you were hired as an expert by Dave James or the Branson Family?
Dan Willens, Appraiser 4610 E. Washington Street Columbus, Ohio 43218 At your request, I have appraised the non- financial assets of the Branson Trucking Company as of December 31, 2007. In arriving at my valuations of these assets I used industry trade data, expert evaluations, and other sources of valuations, as I deemed appropriate under the circumstances. Below is a summary of the results:

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Current Assets: Cash $218,000 Accounts Receivable (net) 610,000 Inventory and Supplies 165,000 Prepaid Expenses 141,000 $1,134,000 Fixed assets: Land 650,000 Building & Fixtures 2,920,000 Rolling Stock 4,230,000 7,800,000 Investments: Bond Sinking Fund 340,000 Common Stock of other firms 650,000 990,000 Total Asset Value $9,924,000