Purposes of the financial valuation:
If you need a partner, or sell part of your company, or merge with another company or liquidate, or sell your share in the company, or enter the financial market, or want to convert the company into a joint stock company, or want to know the size of your current company after the development work you have done after expanding the business and achieving an increasing market portion, or to request financing from loans or funding facilities. You need to evaluate your company (the fair value of the company), whether you are a startup or an already existing and well-established company, that has fixed assets, property rights, or shareholders, has a specific working capital, and has its own customers, inventory, suppliers, creditors, and so on.
The objectives of the financial valuation can be summarized as follows:
- Valuation of companies for the purpose of buying, selling, merging or acquiring.
- Valuating companies for the purpose of expansion and development.
- Valuating companies for the purpose of obtaining loans from local lending institutions and banks.
- Valuation of companies for the purpose of listing in the local financial markets.
- Valuation of companies for the purpose of credit rating.
- Valuating of companies for the purpose of determining the fair value of shareholders’ shares.
- Valuation for the purpose of carrying out the process of liquidating companies with the aim of selling them, or closing them completely.
Approved valuation methods:
- The profit multiplier valuation method and accounting financial indicators.
- The replacement value method of valuation.
- Adjusted book value valuation method.
- The residual value of the company method of valuation.
- The net book value of the company method of valuation.
- The net market value of the company method of valuation.
- Discounted cash flow valuation method (the most widely used and standard for valuation).