Behind the Numbers…

by Talk Business & Politics ([email protected]) 45 views 

Northwest Arkansas Business Journal and Arkansas Business rankings of the wealthiest Arkansans are not intended to be comprehensive and by their nature cannot be considered definitive.

tInstead, the research provides conservative estimates of individual and family wealth based o ?n public documents; information obtained from the individuals and companies; and industry averages and estimates as determined by financial experts.

tStock holdings were based on closing prices on May 27, 1997. They exclude stock options that have not been exercised and holdings that do not require disclosure by the Securities and Exchange Commission. Since public stocks trade on a minority basis, a premium of 1.2 to 1.75 times any values could be paid to acquire control of a company.

tValues placed on private company holdings were deliberately conservative. Following the guidelines used by Forbes and Fortune, the value is based on what a prudent business person would pay to purchase ?the company. Actual market values obviously would vary depending on earnings, buildings, debt, equipment and circumstances unique to an industry. There were no estate or capital gains tax considerations.

tMethodology used by Business Valuation Services of Dallas to determine private company value involved: determining an appropriate industry category, developing a list of comparable public companies; eliminating inappropriate comparables; calculated average and mean “Price to Sales Multiples” based on the stock price of comparables on May 31, 1997; and, based on prior engagements, research and other sources, adjusting the multiple developed to reach a final conclusion. The value developed is for total capital o ?f the business – long-term debt plus stockholders equity.

tThe list generally includes individuals or a “nuclear” family composed of husband and wife, parent and child, siblings, or some combination of those relationships. The Walton, Stephens and Murphy families were intentionally grouped to include all family members for various reasons. Although a single name is listed, stock may actually be owned and listed in another relative’s name.

tAnyone who wants to correct, clarify or make additions to research for the rankings should send information to Jeff Hankins, Northwest Arkansas Business Journal, 21 W. Mountain Dr., Suite 305, Fayetteville, AR 72701, or call either Hankins or Patricia May at 582-9477.