Business Valuations

Our Business Valuation service offers a detailed and comprehensive approach to accurately determining your company's economic value. We consider several key factors that can affect the company's overall value. First, we analyze the company's commercial activities, including sales, marketing, and other revenue-generating activities. Second, we consider the company's growth rate, which can provide insight into its future earning potential. We also evaluate the company's productivity, efficiency, effectiveness, and other operational metrics that can impact its bottom line.

Moreover, we closely examine the company's ongoing projects to determine their potential profits and risks. We also assess the value of any patents or intellectual property held by the company, which can significantly impact its overall value. Finally, we evaluate the company's equity level to determine how much ownership is held by shareholders.

How do we begin our mandate?

The valuation process starts with thoroughly examining the company's accounting information. You must provide us with significant historical financial data on your business to ensure an accurate result. This helps us understand your company's financial history and performance, which gives us a better perspective of its current state. By doing so, we can provide you with a present value that accurately reflects your company's economic and market value and the environment in which it operates.

Methods of Business Valuation

Asset-Based Valuation

Asset-based valuation methods are a type of financial analysis that helps determine a company's value. These methods consider the company's net assets, which include all its tangible and intangible assets (such as real estate, investments, patents, and trademarks) minus its liabilities (such as debt and other financial obligations). These methods are instrumental when a company's intrinsic value is closely tied to its physical or intellectual assets, providing a more accurate picture of its overall worth.

Most used methods – Asset-based valuation.

1. Book Value Method.
2. Liquidation Value Method.
3. Replacement Cost Method.

Income-Based Valuation

Income-based valuation methods are a type of financial analysis used to determine the value of a company based on its expected future income-generating potential. These methods consider various factors, such as the company's historical financial performance, growth prospects, and industry trends, to arrive at a realistic estimate of its future income.

Once the expected future income is determined, it is discounted back to its present value using a discount rate that reflects the time value of money, inflation, and risk. This process lets us determine the company's current valuation and make informed decisions about its financial health and growth prospects.

Most used methods – Income-based valuation.

1. Discounted Cash Flow (DCF) Analysis.
2. Earnings-based Valuation.
3. Capitalization of Earnings.
4. Income Multiplier Method.
5. Dividend Discount Model (DDM).

Market-Based Valuation

The market-based approach is a popular method of business valuation that involves comparing the company being valued to similar businesses in the market. This approach analyzes comparable companies or transactions to determine valuation multiples such as price-to-earnings or price-to-sales ratios, which are then applied to the valued company.

The market-based approach is particularly useful for valuing companies operating in well-established industries with comparable businesses or transactions. By comparing a company to its peers, investors can gain insight into its relative performance and prospects for growth.

Most used methods – Market-based valuation.

1. Comparable Company Analysis (CCA).
2. Market Capitalization.
3. Precedent Transactions Analysis (PTA).

What are the benefits of Business Valuation?

By conducting an in-depth business valuation, we can help you better understand your company’s financial performance and position in the market. Whether you want to make informed investment decisions, sell your business, or know your company's worth, our business valuation service can provide valuable insights.