FINANCIAL SERVICES - OVERVIEW
S-Cube provides cutting-edge consulting services for the design and administration of compensation and benefit programs and financial products that help companies manage their benefit liabilities while enhancing shareholder value.
There are many different reasons for having a valuation analysis performed on a company. These include; merger & acquisition valuations, tax and financial reporting, business combination and PPA (purchase price allocation) goodwill analysis, minority shares and fractional interest valuations, stock option valuations, intangible asset and intellectual property valuations, employee stock ownership plans (ESOPs), litigation/audit support and expert testimony, etc. The issue of cost to the firm versus value to the employee is an important distinction in legal settings, where large differences between the two often exist.
Today accounting requirements demand an increasing amount of fair market valuations. Valuing financial instruments, stock options and other types of equity-based compensation has become more important with the implementation of SFAS 123R, IFRS 2 and IFRS 7.
S-Cube can help establish appropriate inputs into the valuation process, regarding such issues as expected volatility, historical option exercise behavior, expected forfeitures, and estimated option lives. This information is fully supported by a detailed narrative report suitable for review by independent auditors, the Securities and Exchange Commission, the Internal Revenue Service and the Israel Securities Authority.
We can value stock options and other equity based compensation for various purposes
• Financial reporting, principally under SFAS 123R
• Gift and estate tax valuations
 • Other tax-related purposes
S-Cube has a reputation of the highest degree. Our clients include many large corporations and numerous legal and accounting firms that represent businesses, both large and small, in virtually every industry. We have extensive experience valuing all types of equity based compensation, from simple call options to more complex derivatives, including:
• Straight stock options
• Restricted stock
• Stock options with accreting exercise prices
• Profits units
• Outperformance units
• Contingent purchase price elements
We have valued instruments that are subject to vesting conditions including earnings targets, share price targets, total return targets and, of course, time-based vesting.
We apply a wide range of valuation techniques, including:
• Closed form models such as Black-Scholes-Merton
• Lattice models, such as a binomial model
• Synthetic option modeling
• Monte Carlo simulations |
