The current business scenario is becoming increasingly challenging than ever before. Business leaders invest considerable time and effort in building well-defined goals and growth plans to improve company value. At the same time, it is increasingly important to continuously monitor and optimise these plans to ensure they deliver improved value in the long run. Through robust and professional business valuation services, you can leverage real-time data that provides insights into the actual worth of your company in terms of asset values, market competition, and financial values.
Business Valuation Services: An Overview
Gone are the days when business valuations were required to address legal or tax issues. Today, top-notch companies – including big four firms in India – leverage valuation services for a wide range of purposes, as discussed herewith:
● Strategic management and financing
● Business transactions, including divestments and restructuring for price negotiation or determination
● Financial instruments that include hybrid, debt, and other convertible instruments
● Dispute resolution, arbitration, and litigation
● Financial reporting ESOP valuation, testing for goodwill/investment impairment, purchase price allocation, etc.
● Portfolio valuation for private equity funds, venture capital funds, or other investment funds
● Intangibles such as intellectual property, trademark, brand, etc.
Key Considerations for Successful Business Valuation
A professional business valuation firm takes a comprehensive approach to the process and delivers quality results that align with your goals. They will begin with understanding the objective and purpose of the valuation, i.e., what you expect to achieve from the process. Then they will consider important metrics such as the nature of the business, industry life cycle, products and services, and political or economic environment the company is operating in. Certain vital factors are considered, including executive compensation, customer relationship, working capital, liabilities, and assets.
However, other factors can have an immense impact on the value of your business. These include dependency on a key employee(s) or an owner, goodwill and other intangible assets, market position, target customer diversity, and market competition. A business valuation professional will also consider these factors to determine the actual worth of your company and where it stands in the long run.