Business Valuation
HOW MUCH IS A BUSINESS WORTH AND HOW TO VALUE A BUSINESS?
Business valuations are prepared in accordance with the International Valuation Standards, which are also required to follow in Slovenia. The fundamental task of the appraisers (valuators) is to use the appropriate valuation methods and techniques to disclose the true and objective value of the company to the client.
BUSINESS VALUATION PURPOSES
Business Valuation assignments vary depending on the purpose and the most common purposes are:
- To determine the value of the equity or the share price of a target company subject to a buying or selling procedure.
- When raising a capital or before an equity investment is made, the value of the equity or share price is determined.
- To determine the exchange ratio of equity or shares of the merger of two companies or in the process of acquisition (the exchange ratio of shares that will be given to existing shareholders of a company that has been acquired or has merged with another).
- For the valuation of an investment in equity or shares in books of accounts (financial statements).
BUSINESS VALUATION METHODES
The most common business valuation methods to determine a fair price are for your business:
- Discounted Cash Flow Analysis
- Comparable Transaction Method
- Liquidation value
For a credible valuation, the valuator of the company's value must definethe key assumptions for the future on the basis of today and the future,which will affect the current value of the company.
