Valuations
Business valuation — methods and when you need it
A valuation is a hard, defensible argument — in a sale, dispute, asset division or fundraising. Value depends on purpose and method, so it helps to know when and how to do it.
When you need a valuation
- Selling or buying a company or shares.
- Raising an investor or financing.
- A dispute, divorce or asset division.
- Succession and handing the business to successors.
- Conversions, mergers and demergers.
- An in-kind contribution or incentive plan.
The main valuation methods
The income method (e.g. discounted cash flow, DCF) values a company by its ability to generate cash in the future — usually for profitable, operating firms. The asset method is based on net asset value — useful for asset-heavy firms or in liquidation. The market method compares the firm to similar transactions and listed peers. We often combine several approaches so the result is credible.
What makes it credible
- A clearly defined purpose and valuation date.
- Sound, verified financial data.
- Realistic assumptions and forecasts.
- A method matched to the company.
- Independence and compliance with standards.
In short: there is no single 'true' value — there is value for a specific purpose. So we set the purpose first, then choose the method and defend the result.
PT