Business Valuation

Informed Decision-Making: It helps business owners, investors, and stakeholders make informed choices. Whether you’re selling, buying, or planning for growth, understanding your company’s value is essential.

Mergers and Acquisitions (M&A): Valuations guide negotiations during M&A deals. Buyers want to know what they’re acquiring, and sellers want a fair price.

Financial Reporting: Accurate valuations are necessary for financial statements, tax compliance, and regulatory requirements.

Investment Decisions: Investors assess risk and potential returns based on a company’s valuation.

Estate Planning and Succession: Valuations aid in estate planning, inheritance, and business succession.

Litigation and Disputes: Valuations are crucial in legal matters, such as divorce settlements or shareholder disputes.

When would you need a Business Valuation?

Methodology and Accuracy: We consider various methods (e.g., DCF, market comparables, asset-based) and selects the most appropriate for the specific business. Rigorous data collection, accurate financials, and realistic assumptions enhance accuracy.

Depth of Analysis: We explore all relevant aspects: financials, market conditions, competitive landscape, and risk factors. A superficial analysis may miss critical details.

Scenario Testing: We conduct sensitivity analysis (testing different scenarios) to reveal valuation sensitivity to assumptions. A thorough assessment of best-case, base-case, and worst-case scenarios adds value.

Transparency and Communication: We provide clear communication of assumptions, limitations, and rationale builds to build trust. Transparent reporting helps stakeholders understand the valuation.

Advantages of utilising our business valuation service

When conducting a business valuation, we consider several methods to provide insight into a company’s financial standing.

Market Capitalisation: This is the simplest method. It involves multiplying the company’s share price by the total number of shares outstanding.

Times Revenue: Under this approach, a stream of revenues generated over a specific period is applied to a multiplier (which varies by industry and economic environment).

Earnings Multiplier (P/E Ratio): It compares a company’s share price to its earnings per share. A higher P/E ratio suggests higher growth expectations.

Discounted Cash Flow (DCF): This gold standard of valuation estimates a company’s value based on expected future cash flows, discounted to present value.

Book Value: Calculated from the balance sheet, it subtracts liabilities from assets (excluding intangible assets). However, it may not fully reflect a company’s true value due to historical cost accounting.

Liquidation Value: This assesses the value of a company’s assets if it were to be liquidated.

Choosing the right method depends on the specific context and purpose of the valuation. Consulting with financial experts can provide valuable insights.

Methodologies

Online Calculator Tools

Try one of our online calculator tools to get your business’s value or to derive your discount rate (WACC).

It’s a great starting point for buyers, sellers, brokers, and others who need quick estimates.

For a more detailed analysis, contact us to obtain an official Business Value report for your company.