Company valuation
Company valuation
Business valuation is a process of determining the economic value of a company, through the application of different techniques.
This value represents a fundamental indicator for any corporate finance transaction, such as M&A, listings, investments in unlisted companies (private equity and venture capital) and others.
What are
the main existing valuation methods?
- Market approach
- Cash flow method (income approach)
- Cost approach
The market approach provides an indication of value through comparison with similar or identical assets.
The income approach provides an indication of value based on on the ability to generate future cash flows.
The cost approach provides an indication of the burden that would be incurred to create or replace the company and its assets.
ApicAll supports clients in identifying the most suitable valuation process for their business context, helping them to distinguish what is technically verifiable from what represents just a “sentimental value”.
Every business valuation is set up according to the objective it must serve. The most frequent methodology is the search for market value, i.e. an objective value that differs from the investment value (which expresses the direct benefits offered to the person holding it), the negotiation value (which expresses the value at which the asset should be negotiated between identified parties), the liquidation value (which represents a price formed under non-ordinary conditions) and from other intrinsic or conventionally fixed values.