A business valuation focuses significantly on identifying the consideration at which such a business may be brought or sold in an arm’s length financial transaction. This may involve assessing future cash flows, present values, assets, and the tradable value of intangibles/goodwill.

The need for company valuation can arise due to several reasons. From business sale, partner exit to public offerings and net worth certification, valuation support is required. The process of business valuation is used to determine the worth of a business using objective measures and evaluating the various aspects of the business.

The tools used for valuation can vary among industries and businesses. Some of the common approaches include a review of financial statements, discounting cash flow models, and similar company comparisons. People also carefully study the sales trends, customers, suppliers, and market. Deciding on a fair value is usually one of the main hurdles in negotiating a business transaction. Business valuation adds more complexity to the overall transaction process.

Our business valuation support services begin with getting access to financial documents and other related information. Some of the things we look at include financial statements for the past 4-6 years, tax returns, management compensation, employee data, patents, shareholder agreements, sales breakdown, product margins, etc.

We also conduct on-site visits and independent research on market conditions to understand the strengths, trends, conditions, and risks. After all, this is done, we apply an appropriate valuation method or a combination of methods best suited to the business and the available information. The valuation is done at arm’s length without the potential synergies or strategic considerations.

The output of this exercise is to get specific assurance using numbers and not estimates. Finding the true value of a company is necessary because if you know what your value is, you can negotiate your way during a transaction. You can also reject a deal if the offer is below the valuation.

A valuation can also help potential investors to see where their money is going and how the business is going to provide them with a return on investment. You can also use the valuation numbers to set new goals to increase the value over the next few years. A valuation can be used as a powerful driver of how you can manage the business. The value of knowing your business’ worth is invaluable!

Our valuation support experts have deep experience to handle complex transactions and business valuation requirements. We cater to different businesses and business models to provide insights that can enable you to be in a strong position during a transaction and help you chart the course for the future.