Know about Business Valuation


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When you're thinking of selling your business, know what it is worth of your business. If you want to Know About Business Valuation, SellMyCompany will provide marketing plan and attract the right buyer at the right price for you. To know more visit our website.


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Understand Business Valuation


Business valuation is a process and a set of procedures used to estimate the economic value of an owner's interest in a business. Valuation is used by financial market participants to determine the price they are willing to pay or receive to affect a sale of a business. Valuation is the process of determining the economic value of a business or company Valuation of a company reflects the performance of the company – both its past performance as well as expectations of its future performance. Value of a business can be arrived at by using objective analysis, but the transaction is finalized at the negotiated price at which the Seller is willing to sell and the Buyer is willing to buy. Intorduction to Valuation


How is Business Valution Done? There are dozens of valuation models, but only two valuation approaches: intrinsic and relative. The intrinsic value of an asset is determined by the cash flows that the asset is expected to generate over its life, keeping in mind the certainty of such cash flows. Assets with high and predictable cash flows should be worth more than assets with low and volatile cash flows. In relative valuation, assets are valued by looking at how similar assets are priced by the market and performing a comparative analysis. When you determine what to pay for a property, you do so by comparing the prices of similar properties .


Valuation and Its Facts •VALUE VARIES WITH PERSON, PURPOSE AND TIME •Value has different meaning when it comes to different person or place or time. Its very subjective. •PRICE IS NOT THE SAME AS VALUE •Price of the business is not equal to value of the business •TRANSACTION CONCLUDES AT NEGOTIATED PRICES •Valuation prices are important to determine but depending on the seller and buyer the transaction takes place at negotiated prices


WHY SHOULD YOU GO FOR VALUATION? ▶Determining the consideration for acquisition/ sale of business or for purchase/sale of equity stake ▶Determining the swap ratio for merger/demerger ▶ Corporate restructuring ▶ Sale/ purchase of intangible assets including brands, patents, copyrights, trademarks, rights ▶Determining the value of family owned business and assets in case of family separation ▶Determining the fair value of shares for listing on the stock exchange/going public ▶ Liquidation of company ▶ Voluntary assessment ▶ Dispute resolution ▶ Regulatory mandate


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