Overview
Valuation is the process through which the value or of Business is determined in the market. This is the price of your business which investors are ready to pay you. This process is broadly used in the financial market by investors and economists. The profit of your business and risk which is linked with it both matter a lot in the valuation process. The financial investors evaluate every single aspect regarding your business. There are some set standards which are used by marketers to prepare the valuation report of the company in which market value, investment values are included. All other values like going concern value, disposition and liquidation values are also evaluated in this process. The reasons behind preparing this valuation report are different. It can be made for the expansion of your business or it can be prepared while top management asks you for annual or quarterly reports. Generally, the most common reason behind preparing this report to sell the business or Merger with other Company.
Information that you must gather
You must collect and analyze the following information while making this report
• You should clearly define the reason behind making this report
• If you are selling the business then you must explain the reason behind selling this business. Either you were tired while running it or it got flopped.
• You should also need to prepare the whole history of the business like the income statements of the business, the liquidity of business and business growth
• You must prepare the Balance Sheets of past five (5) years which shows the worth of your business.
• You have to do an analysis of your competitors, their prices and their products and services as well
• You have to prepare the chart of monthly payrolls of your employees.
COMMON USED BUSINESS VALUATION METHODS
• Asset-based business valuation methods
• Income-based business valuation methods
• Market-based business valuation methods
• Discounted Cash Flow
• Exit Strategy and Investment Stage
• Combined Method
Advantages of Valuation
Value of Business Assets
Business valuation report determines the value of assets of Business. You must be aware of the intrinsic value of Business so that you can obtain proper Insurance coverage, know how much to reinvest into the company.
Resale Value
Valuation is also important when you are willing to sell your Business. Valuation should be done at a prior stage so that you can take measures to increase the value of Company to achieve a higher sell value.
Dissolving Disputes
Sometimes disputes may arise in business between the partners or other stakeholders and valuations becomes a solution to showcase position and growth of Business.
Making Mergers/Acquisition easy
During the Restructuring of a business, the promoters and investors are interested to know the business they are investing into. An optimum Business valuation creates winning situation to both the parties.
Helps in Decision Making
Business Valuation Report helps the business while making some important decision. This Report is very crucial as the most of the major decision are taken on the basis of Valuation Report.
Procedure of Business Valuation Report
Consultation One of our Experts discuss with you the Business and its idea and will do complete analysis of your Business.
Valuation
Our Experts do proper research of your Business and apply proper Valuation Rules to calculate various Ratios.
Draft Valuation Report
On the basis of discussion with our experts will share a Draft Valuation Report and once you approve it, they will share the final Valuation Report.
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