- FundRaising Valuation
- Business Valuation
- ESOP Valuation
- Deal Advisory and Investment Documentation
- Fairness Opinion
- RBI Valuation
- Income Tax Valuation
- SEBI Valuation
- And More
Valuation is a process of finding the accurate market value of a business, with the help of a valuation consultant to analyse various aspects like growth rate, future prospective, and tangible and intangible assets value.
Valuation not only analyses the value of the company and its assets but is also used to ascertain the value of shares and different securities.
Valuation consultants use various valuation methods that determine the most exact value.
Valuation is performed not just for analysing the market value of a business but also important to perform for planning exit strategies, during litigation for funding and for buying and selling a business.
Who are Valuation Advisors?
A valuation advisor refers to a firm of valuation advisors whose services are engaged by a business or company to conduct a business valuation.
A valuation advisor is a business valuation specialist or a third-party advisor that is employed by a business with the sole objective of evaluating the business’ market value.
A valuation specialist or advisor will use various valuation methods which will be used to ascertain the value of the business or the value of an asset of interest or shares and stock.
After conducting thorough research, the advisor prepares a business valuation report which will be used in case of litigation, buyout, selling or buying of a business, etc.
Different Types of Valuation Methods
These are multiple approaches which are used to value a company with a different aspect towards the company and its operations.
1. Asset-Based Valuation Method
Asset valuation simply refers to the process of finding the correct and accurate value of the company’s true assets. Such as stocks, brands, equipment, goodwill, building and many more. This valuation method is opted as a part of a huge business valuation process and also before you sell or buy any asset. An asset valuation also helps you to identically calculate the net worth of your business by adding current asset value and less liabilities value.
2. Discounted cash flow Valuation Method
Discounted Cash Flow Valuation Method estimates the current value of an investment in a business in account of future cash flows. DCF is used to determine the calculated investment that is required, in order to get a previously determined return.
This DCF method is actually based on the concept of time value of money which actually means that the current money of an individual is far more than the same in future.
3. Market Valuation Method
A market valuation method is also known as Market comparison approach method. This method considers the market price of comparable assets while also determining the appraisal value of an asset and business ownership interest.
This method is ideal when a business usually has similar concerns like Industry, revenue, growth, influence and market potential. Market based valuation method works great with real estate businesses and publicly traded companies.
Process of Business Valuation
Business valuation is a long process which is taken by the professionals for analysing various aspects like growth rate, prospective future earnings, the value of its tangible and intangible assets, and the company’s management.
Business Valuation process includes few steps that are given below:
Step 1: Understanding the Purpose behind Valuation: the purpose behind the valuation of a business is to know the business current value along with the assets and debts. Business valuation is necessary to know how long your business will run in future.
Step-2: Maintaining the Values of the Premises: Values among differences in pricing between a seller and a buyer is Based on value that is often stipulated by regulation, laws, contract and reasons for pursuing valuation. Another reason behind the purpose of valuation and basis of determining business values are going into concern. The permanent operation of the business and use of the business assets is assumed and later operations & sale of the assets are assumed.
Step-3: Collection of Relevant Data: Data like Leases, contracts, customer agreements, financial records, loans and multiple different legal documents. These documents are necessarily required for understanding the company, its history, basics, values, finances, all these things are required to overview the information that is required for maintaining a perfect record.
Step-4: reviewing Business Financial History: before evaluating a company, it is very important for a valuator to have an in-depth knowledge about the company history, Previous ownership and last year's financial performance. In order to do better and to find better financial opportunities, one should know the business from its roots.
Step-5: Final Determined Value: The final step reaches at a conclusion of the value. This is usually taken forward with a typical valuation report, which consists of all the required information and valuation approach that is used as the assumptions that were made in previous projects.
What is valuation consulting?
Valuation in a company is extremely important and so is consulting for valuation. Business valuation consulting conducted by highly professionals provides the data backed evaluations to draw the actual value or worth of a company's services.
Evaluating a company helps business to depict the definite growth of a company over the time.
Valuation consulting for an organisation requires several numerous advantages. Which are given below for your in depth understanding:
When does a company need Valuation?
Company valuation is very important and so is consulting for valuation. Business valuation consulting conducted by highly professionals provides the data backed evaluations to draw the actual value or worth of a company's services.
Valuation is a process that determines a company’s exact value in terms of assets and investments that are opposed to the cost and current market value. The ultimate reason behind evaluating a company is to receive a strategic plan, capitals, investment security and Merger and Acquisition.
Benefits of Valuation
Benefits behind company valuation are given below:-
1. Improves Knowledge of company assets:
The most important benefit of business valuation is that it provides you an exact knowledge about business assets. It is very important to have an exact business valuation report because estimates are not always acceptable as they are generalised. This will also help you to know how much is necessary to reinvest in a company.
2. More investors
An investor always asks for a full company valuation report. So if you are one of those who are seeking any investors then valuation is an important tool for you. When you look for an investor to fund your company for promoting its growth or you are planning to attract an investor to save your company from financial disaster.
3. Mergers and Acquisition
When another company asks your company to purchase, you are required to provide them with the whole value including what the assets withholdings are, how it has grown and how it can continue to grow. The first thing the investor is going to see is your company’s valuation report. You should provide your investors with an accurate valuation report so that they will get an idea on how your company works.
4. Protects Business Value
A business valuation report highlights the business weaknesses and provides an opportunity for business owners to tackle business weakness and in future loss. Also identifies the valuation process which helps you to know your business more deeply. Also if you are a business owner then valuation will help you to save your business from future troubles and financial disasters.
Why Choose Especia for Valuation Services:
Our team of experts and highly professional valuation consultants strive to deliver world class effective valuation assistance to all major industries.
Especia understands the importance of valuation for a business and caters to all major industries, big and small.
Our core values of professionalism and ethics imbue our work culture as we are passionate and dedicated to representing our clients with utmost professionalism.
At Especia, we are dedicated to assisting businesses in becoming more successful at operating by establishing an efficient regulatory management system, cutting costs, and promoting growth.
But our team also constantly conducts research and prepares case studies on various valuation trends to be on top of the game.
Especia’s team of consultants provides valuation services to companies in the Delhi-NCR region and around different parts of India.
Especia’s Valuation Advisory Services
With over 250 valuations completed to close major deals, Especia is India’s leading valuation advisory service. Especia performs elaborate and complex financial and tax reporting valuation tasks for industries big and small.
Especia’s team of qualified and experienced chartered accountants and financial managers provide astute expertise on financing, accounting, and tax-related matters.
By using sophisticated critical valuation methods and tools, Especia’s valuation advisory services provide accurate results for legal and tax compliance, financial reporting, and overall better decision making.
Especia’s valuation services boast of a wide offering which includes-
A SEBI registered merchant banker and a chartered accountant is recruited to carry out the valuation services. Such services have to be internationally accepted by several valuation methods which will be carried out.
The ultimate purpose of valuation is to determine the worth of your company's assets and company, which will be compared with the current and the actual market price.
A basic valuation process usually takes 5 to 10 minimum working days, after the process of valuation is conducted to receive an offer or to have the mortgage to be confirmed.
While conducting a valuation the process includes a valuator who acts like a prospective buyer and they will make an assessment which is the valuation process of the company based on the several standardised factors as well as it will help your company to determine its future.
Conducting a Valuation in a company has several aspects but most important are to determine your company’s future profitability, cash flow, potential risk, objectivity with subjectivity and motivation & determination.
Especia Associates LLP is the best valuation services provider. We have offered more than 250+ successful valuation services to top class brands in India and worldwide.
Yes, valuation really matters to get a justification for paying and selling. More often it is also important for an individual's growth because it will help you to know your company's actual status and position and also alarms you for future financial disasters in advance.
There are several types of methods that are used by valuers while valuing a company but the top most priorities are Market Valuation Method, Income Valuation Method and Cost Valuation Method hence each method has their specific advantages and disadvantages but these methods are more commonly used for company valuation.