Valuation of Business
Valuation of business is a determination of the value of a company as a property complex able to generate profits for its owner. When conducting the expert evaluation, the value of all assets of a company is to be determined: real estate, machinery and equipment, inventories, investments, intangible assets. In addition, we separately assess the overall performance of the company, its past, present and future earnings, development prospects and the competitive environment in the market, and then we compare the evaluated company with similar enterprises. Based on such comprehensive analysis, we determine the real value of business as a property complex, able to make profits.
A special case of business valuation is the valuation of an enterprise and the valuation of fixed assets of a company. These services are also provided by our valuation company.
Business valuation is needed in the following, most typical cases:
- Sale of business
- Sale of a part of property of an enterprise (business)
- Restructuring (merger, de-merger, acquisitions, etc.) or liquidation of an enterprise conducted either by the decision of its owners, or by the decision of the Arbitration Court in case of bankruptcy.
- Purchase-and-sale of enterprise’s shares in a securities market (purchase of an enterprise or its part that are in corporate ownership)
- Purchase-and-sale of shares (contributions) in the Authorised Capital of a limited liability company (the share is assessed in monetary units)
- Leasing an enterprise out. Valuation is important for determination of lease fees and further purchase of the property by the Lessee (if it is stipulated in the lease agreement)
- Implementation of the investment project for the business (enterprise) development, when the original value of the business (enterprise) shall be known in order to ground the project
- Obtaining loans secured by company’s property (mortgage)
- Industrial property insurance
- Revaluation of fixed assets.
It is crucial that market-based valuation of high quality is not limited by simple accounting the costs associated with the production of goods, it shall also consider the economic image - position of the enterprise in the market, the time factor, the risks and the level of competition. Appraiser’s approach to determination the value is based on the economic concept of a company. So, appraisal is the determination of the market value of any object, that generates income or cash flows; such market value is defined based on the present value of the expected future cash flow, discounted at the rate of return required by an investor for the investments with comparable risk.