- 36 -
($4,000,000 and $4,088,450, respectively). However, the
aggregate value of SWMG's intangible assets estimated by the
Dutcher appraisal ($2,515,255) differed markedly from the amount
postulated by Dr. Levin through the use of his formula
($1,632,377). Since the Dutcher appraisal and Dr. Levin's
formula both started with substantially the same figure for
SWMG's business enterprise value, and both subtracted an
identical figure for fixed assets ($1,156,733), the marked
difference in their outcomes is attributable to the fact that Dr.
Levin believed that the SWMG physicians' accounts receivable
($1,210,890 as of November 1, 1994) also needed to be subtracted
(and that no adjustment needed to be made for working capital),
whereas the Dutcher appraisal postulated that all current assets
and liabilities (i.e., including accounts receivable) were best
accounted for by subtracting an amount for implied working
capital, which was estimated as $416,462. The difference between
the Dutcher appraisal's working capital figure and Dr. Levin's
accounts receivable figure, when added to the approximately 2-
percent difference in the Dutcher and Houlihan estimates of
SWMG's business enterprise value, accounts for the discrepancy in
the estimates of SWMG's aggregate intangible value by Dr. Levin
and the Dutcher appraisal.
In his appraisal, Mr. Dutcher also asserted that "it is my
opinion the physician compensation offered SWMG shareholders by
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Last modified: March 27, 2008