Business Valuation - Company Valuation

Company is trade subject as well as each good. When an enterprise makes the object of buying and selling process it is inevitable to determine its price. Therefore existence of an enterprise market necessary intrudes demand for evaluating company's value in case of buying and selling process.

However, the reason for starting a business valuation process does not have to be simply buying and selling process of the company, but also the need for determining the real basis for number of other business transactions.

Accordingly, valuation process can be performed when deciding about following:
- buying and selling process of total company,
- buying and selling process of parts of the company,
- merging of companies,
- splitting the heredity,
- investing in companys,
- approving credit with mortgage registered with asset,
- transforming creditor's claims in the capital share of the company,
- assessing the lease size,
- manager's efficiency, etc.

Valuation Methods

There are number of valuation methods in use today, but it is essential to know that each of them isn't appropriate in all cases. In other words, one can't tell that assessed company value is correct when implementing only one certain method.

There are various valuation methods, but each of them is based on two potential fundaments:
1. Asset,
2. Profit.

Valuation methods related to asset have their basis in real estate, movable property, stocks, money, claims and rights. These methods are static, therefore asset state in specific moment is the background when using these methods.

Valuation methods based on the profit have their grounds in the gain that results from using the asset in its physical and economic lifetime. These methods are called dinamic methods. They lay on the basis about asset ability to produce financial surplus in the future.

Realizable company value

Company's value as the result of the final estimation process has to be observed separately from its selling price. Namely, process of establishing the selling price is the result of the buyer and seller decision during the negotiations upon purchase and selling process. However, the procedure and the result of the estimation significantly effects cost negotiations. Arguments for making that decision are achieved during the company's value evaluation process. In fact, there is no "magic formula" for specifying company's price. Only "true" value is set by free competition on a free market, but even than there are potential big price changes in a very short time, depending on a number internal or external factors as general economic conditions, investor's expectations, moment situation in certain branch of activity, etc. PBIRO provides you with expeditiously, efficient and full service in order to carry out company valuation.

PBIRO provides you with expeditiously, efficient and full service in order to carry out company valuation.

Feel free to contact us!