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Thunder Bay Transportation: A Case of Business Valuation and Negotiation

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  • Camillo Lento

Abstract

Thunder Bay Transportation (TBT) is a very versatile case that can be used in several milieus and at various levels of difficulty. The case describes the process involved in the purchase and sale of a private business. Mr. Getzko, owner/manager of TBT, is attempting to sell his business to pursue retirement. Sudbury Systems (SS) is pursuing an acquisition of TBT. Students are required to assume the role of either Mr. Getzko’s accountants (seller) or Sudbury Systems’ accountants (buyer) to: (1) develop a preliminary business value, (2) negotiate adjustments, and (3) arrive at an agreed‐upon business value to finalize the sale. Students will explore both business valuation approaches (earnings based and asset based) and various business valuation concepts (e.g., normalized earnings, sustaining capital reinvestment, earnings multiple, redundant assets, etc.). Thunder Bay Transportation: Un cas d’évaluation d’entreprise et de négociation Résumé Thunder Bay Transportation (TBT) est un cas très polyvalent pouvant être utilisé dans plusieurs contextes différents et qui convient à divers niveaux de difficulté. Il traite du processus intervenant dans l’achat et la vente d’une sociétéà capital fermé. M. Getzko, propriétaire dirigeant de TBT, tente de vendre son entreprise afin de pouvoir prendre sa retraite. Sudbury Systems (SS) envisage l’acquisition de TBT. Les étudiants sont appelés à jouer le rôle des comptables de M. Getzko (le vendeur) ou des comptables de Sudbury Systems (l’acheteur) pour : 1) procéder à l’évaluation préliminaire de l’entreprise; 2) négocier des ajustements; et 3) parvenir à une valeur consensuelle pour conclure la vente. Les étudiants explorent à la fois les méthodes d’évaluation d’entreprise (approches fondées sur les bénéfices et sur la valeur des actifs) et diverses notions pertinentes à l’évaluation d’entreprise (notamment celles du bénéfice normalisé, du réinvestissement de maintien, du ratio cours/bénéfice et des actifs hors exploitation).

Suggested Citation

  • Camillo Lento, 2010. "Thunder Bay Transportation: A Case of Business Valuation and Negotiation," Accounting Perspectives, John Wiley & Sons, vol. 9(4), pages 291-318, December.
    • Handle: RePEc:wly:accper:v:9:y:2010:i:4:p:291-318
    DOI: 10.1111/j.1911-3838.2010.00015.x
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