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$10,553,101 when multiplied by his $1,846,793 normalized
(indexed) earnings for 1993 through 1996.11
Mr. Dorman, however, abandoned his income approach value and
market (comparative) approach and relied solely on his net asset
approach value of $17,341,379. Conversely, Mr. Burns did not use
the net asset approach because Godfrey had “been engaged in the
manufacture and marketing of boats since 1958 * * * [and] is
clearly an established and successful operating company.”
Because of that fact, Mr. Burns concluded that valuation of
Godfrey’s assets is “inappropriate because it implies that the
company’s value is limited to its tangible assets.”
Mr. Burns also performed a market approach analysis and
located 15 public equity companies in the same general industry
as Godfrey. He noted that many of the companies were also listed
in a 1995 independent appraisal seeking to establish valuation
multiples for Godfrey. Mr. Burns admits that none of the 15 are
“perfect comparables”, but he contended that they are
sufficiently similar to “indicate acceptable valuation
multiples”. Using those multiples, Mr. Burns’s market approach
resulted in a value range for Godfrey of $34,700,000 to
$51,500,000. Mr. Burns also noted that Godfrey’s profitability
11 It is conceptually incongruent that an income approach
would produce a $10,553,101 value, approximately 40 percent less
than a $17,341,379 net value approach for a manufacturing company
with a sustained successful income and profit history.
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