What is Corporate “BOOK VALUE” & “PAR VALUE”?

TWO INVESTING DIFFERENCES = TWO QUICK THOUGHTS

BY DR. DAVID EDWARD MARCINKO MBA CMP®

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SPONSOR: http://www.CertifiedMedicalPlanner.org

BOOK-VALUE: Cost of capital assets minus accumulated depreciation for a healthcare [corporation], or other organization.

The net asset value of a [healthcare] companies common stock. This is calculated by dividing the net tangible assets of the company (minus the par value of any preferred stock the company has) by the number of common shares outstanding.

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PAR VALUE: For common stock, the value on the books of the corporation. It has little to do with market value or even the original price of shares at first issuance.

The difference between par and the price at first issuance is carried on the books of a corporation as “paid-in capital” or “capital surplus.”

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ASSESSMENT: Your thoughts are appreciated.

Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™

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Boosting Medical Practice Goodwill Value

Goodwill Hunting

What’s your Office Really Worth?

[By Dr. David E. MarcinkoStethoscope; MBA]

There are several measures a physician can take to increase the value of medical practice goodwill, which in turn will make the practice more desirable, and profitable, when selling or taking on a partner.

These are listed below for your consideration:  

  • Keep good financial records. Know your capital purchases, and have your balance sheet, statement of cash flow and net income statement up to date.
  • Continually monitor key financial ratios, such as profitability, creditors, long-term debt management and medical equity value-added.
  • Have adequate practice insurance, including property liability coverage, plus have workers’ compensation for staff and life and disability insurance on the key doctors.
  • Build a brand identity for the practice rather than an individual brand identity for you as a physician. This helps in developing a business that others could assume and operate.
  • Have a practice continuation plan that stipulates how the practice will be sold or continued in the event of a physician’s death or disability. Specify who will buy the practice and for how much. And specify whether the purchase will include land, buildings, inventory, licenses and goodwill. Have a covenant that specifies the procedures to follow when a physician leaves the practice.
  • Have strong relationships with everyone who does business with your practice, including supply vendors as well as referring doctors and fellow physicians.
  • Be organized when it comes time to present the supporting information. Don’t accept the first valuation given. Numbers can be changed, if you can present substantive reasons.

MORE: AMA News Interviews Dr. Marcinko

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. How have you reacted to the recent declines in both medical practice [business] and personal [doctor] goodwill?

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

Our Other Print Books and Related Information Sources:

Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™8Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™

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