COMPANY VALUATION

By July 18, 2018Blog-page

A GOOD VALUATION HELPS YOU TO NEGOTIATE BETTER

At Calder Associates we understand that in the face of a corporate operation the valuation is a negotiating tool. Not only should we show value created in the past (as do the majority of our competitors) but also the ability to create future value in the business. Being the Market Value.

DO YOU KNOW YOUR COMPANY’S VALUE…

Calder undertakes high-quality valuations for sellers, buyers and for other investment houses.

Having a strong and practical valuation is very useful, as it helps provide a thorough knowledge of the variables which underpin a business’s value, and the impact that the improvement or deterioration of each of these variables can have on its value.

Drawing up a valuation report is a fundamental step in preparing a good negotiation in order to maximise value, by helping to create well thought-out, logical, numerically market value based arguments.

WHY DO YOU NEED A VALUATION IF YOU ARE A SELLER…

The valuation is a negotiating tool which will act as a support to arguments within the negotiation, by creating effective and rational arguments.

  1. It will allow you to know the true value range of your business.
  2. It will help you to understand the strengths, weaknesses and true market value of your business, something especially important in the lead up to the sales process.
  3. It will allow you to understand the variables which underpin the value and the impact that the synergies with the purchasing company will have on the value. If we negotiate well it will allow us to capture a large proportion of the value of these synergies.

WHY DO YOU NEED A VALUATION IF YOU ARE A BUYER…

If you are a buyer, you should not accept the seller’s valuation, you should do your own. It will help you to understand the company in depth and spot angles for negotiation.

  1. Given that many sellers’ judgment of the value of their business is clouded by emotions, you will only be able to demonstrate its true value with a rigorous valuation.
  2. To understand a business’s value it is important that you know how to diagnose its situation and the trend in its balance sheet and what this means based on market value.
  3. Analysing the company’s financial history will help you to see how the company has performed, its current state, and where it has been heading.
  4. You should study the cash flow, what is to be paid out over the coming months, and how this compares to your industry and the international market value, so that you can adequately structure the offer.

A GOOD VALUATION HELPS YOU TO NEGOTIATE BETTER

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