We perform business valuations by a process of evaluation and selecting a valuation method that best suits the circumstances and intention of our clients requirements.
There are numerous valuation methods available in determining the value of a business. It is considered an art or a subjective process rather than a calculation of arithmetic exactness.
There are many factors to consider when completing a business valuation and the weighting of each factor will vary according to the industry and/or the country it is in.
Some factors include:
Comparative sale price, future earnings, business life cycle, remaining life of tangible assets, alternative income streams, staff competency, morale, corporate governance, economic conditions, strength of net cash flows, licences, patents, intellectual property, merger synergies, premiums paid for shareholder control, competitors, stakeholders, environmental and political factors, supply chain, cost of capital, number of new entrants, normalisation of accounts, barriers to entry, substitute products or services, acceptable return on capital, PE ratio, EBITA, NPAT, discounted cash flow, weighted average cost of capital, Fisher’s Analysis, opportunities for expansion or diversification, geography, regulations, sustainable competitive advantage, business longevity, business plan, resources, research and development, existing contracts, clawbacks, stage payments, guarantees and restraint of trade.
To achieve the best valuation involves a detailed process of evaluation and selecting a valuation method that best suits the circumstances and intention of the person wishing to attain the valuation.
For further information please contact Peter Dunoon on 02 8064 1845.