The valuation of a company
The valuation of a company is a profound exercise In which we provide our clients a thorough advice.
They key of an excellent valuation report is the understanding of the business and the activities of the entity to value. It is critical to understand the drivers of value within the organization, which can be a robust EBITDA, an excess cash position, a niche activity proving a unique selling proposition, the growth potential and quality of the business plans, the presence of strong human capital or the high operation efficiency of the company.
Based on the characteristics and the value drivers of your company, our specialists will choose one or more methods for the valuation exercise:
- Free cash flow approach : the future free cash flows will determine the valuation of the company, using a WACC (weighted average cost of capital) to calculate their present value. The future cash flows can be derived form historical financial data, the business plan or a combination of both.
- Multiples approach : the value of the entity is based on a market multiple that can be derived from similar transactions in the market. This multiple is applied on a profit and loss ratio that is generally excepted such as the EBITDA
- Adjusted net equity approach : the net equity of the company is the basis of its valuation. It is corrected for potential gains on the book value of some assets.
Our valuations services are documented in a comprehensive report. The extend and depth of reporting is scalable based on your needs and budget.
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