Business valuation is the process of determining the economic value of a business or company. It depends upon the purpose of Valuation, Stage of Business, Past Financials, Expected financial results, industry scenario and various other allied factors.Valuation is a factor of negotiation between the investee and investor. Valuation cant looked upon as a standalone process.
A business valuation may be required for various purposes like:
Business Valuation can be conducted only by a Registered Valuer.
Registered Valuer’ means a person registered as a Valuer under Chapter XVII of the Companies Act.
The following persons are termed as Registered Valuer:
Basically there are two valuation approaches and a dozen Valuation Model. The two valuation approaches are:
As per Income Tax Act, shares have to be valued either at Book Value or as per Discounted Free Cash Flow method.
The factors to be considered for Valuation depend upon the purpose for which the valuation is conducted. Generally, the following factors are taken into consideration while valuation of the business:
To put it simple and short-you get to know the “real market worth” of your business. Consequently, you are in a much better positions to plan the future direction of the business. Estate and tax planning also require a business valuation.
Chartered Accountants can value businesses, but most accountants do not focus on valuations. Further, since a traditional CA is often more involved in managing the day to day affairs of the company, they generally lack the necessary training to produce an accurate analysis. Hence, it is always advisable to opt for such a firm which has specialized departments and expert professionals for catering to this requirement. Many businesses and professionals have used our valuation models for successful pitching of their business plans and securing Investments or regulatory shields.
Not at all. Business valuation is more of a futuristic method. An appraiser normalizes the financial statements to reflect the current/future worth of the business on the basis of a working average figure.
Once we receive the necessary information regarding your business, we will complete the valuation and return it to you in 5 business days.
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