For asset-heavy companies, we use Asset Valuation to appraise the company. The process takes into account more than Owner Benefit. It includes Inventory and Leasehold Improvements as well.
The formula is: Fair Market Value (FMV) divided by Fixed Assets (FA). Then we account for three other factors, 1) Leasehold improvements (LI) – which include renovations made to the structure in which the business resides, along with capital improvements that are detachable, 2) Owner benefit (OB) – for 1 full year and 3) Inventory (I) – which should be reconciled and counted for an accurate number.
Altogether, the above are used to formulate the market value for the business.