Business valuation
Determining business value for a transaction, a transfer of shares or a decision — with regard to the requirements of the International Valuation Standards.
Overview
A well-founded company value, on a standards-based methodology
When raising finance, bringing in an equity investor, restructuring, planning a development or investment, or selling and buying a business share, the market value of the company or share concerned is a decisive factor.
The International Valuation Standards (IVS) are a body of standards issued by the International Valuation Standards Council (IVSC), a non-profit professional organisation. We perform our valuation engagements with regard to the requirements of the IVS.
In line with the IVS, three basic valuation approaches are distinguished: market-based, income-based and cost-based. Which of them carries more weight in a given case is determined by the company’s operations, the data available and the purpose of the valuation — and we always explain this in the valuation.
What we do
Valuation approaches and the content of the service
Our business valuation service includes, among others, the following.
- Market approach. A relative, multiples-based method: we estimate the company’s current market value using a multiple derived from the data of an appropriately selected reference sample — EV/EBIT, EV/EBITDA or EV/revenue, for example.
- Income approach. Yield-based calculation: the source of value is the present value of the returns and cash flows expected to be realised in future, using the discounted cash flow (DCF) method.
- Cost approach. Asset-based calculation: the source of value is the market value of the physical assets held at the valuation date.
- Analysis of the company structure. We review the corporate and ownership structure and the related relationships.
- Review of planned and actual figures. We examine and analyse the business plan data — ideally a medium-term business plan — and the actual figures.
- Market and competitor analysis. We prepare a market risk analysis and a competitor analysis.
- Financial position. We examine and analyse the company’s financial position.
- Asset position. We examine and analyse the company’s asset position.
- Determining the company value. We determine the company value by applying the valuation models set out in the IVS, presenting the assumptions behind the calculation.
Frequently asked questions
What is worth thinking through before a valuation
Which valuation method do you apply?
The purpose of the valuation and the data available decide. The three IVS approaches — market, income and cost — do not exclude one another: several calculations are often made, and the results together give a realistic picture. We explain the reason for the choice in the valuation.
How detailed a business plan is needed?
The income-based calculation requires business plan data; a medium-term business plan is ideal. If none is available, we start from the actual figures and the market analysis, but this narrows the range of methods that can be applied.
What can the finished valuation be used for?
To underpin transaction negotiations, financing or investment decisions, transfers of shares and internal decision preparation. The value always relates to a given date and to the documented assumptions, so if these change a review of the valuation is warranted.
What method is used for the valuation?
We typically use several methods at once: discounted cash flow, comparison based on market multiples, and asset-based valuation. We test the results against one another, so the value does not rest on a single assumption.
How long does a valuation take?
Typically two to four weeks after the necessary data has arrived. The pace depends mostly on how quickly data is provided and on the complexity of the company; in urgent cases we can give a preliminary value range.
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Request a quote
Do you need a business valuation?
Tell us what the valuation is for, and we will tell you what data will be needed and on what timetable we can work.