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Business sends all the requested documents to IndiaBizForSale.com by email on support[at]indiabizforsale[dot]com
Business Valuation expert conducts phone interview with the promoter(s) / partners / director(s) of the business.
Market research and assessment of the business and industry will be undertaken.
Possible second round interview with the CA's / Auditors for further details (if required).
Valuation report is provided to the Business.
In preparing our valuation we have relied upon such information as has been provided by the client, information otherwise should be verified. In the event of significant variation from the information initially given to us, our valuation could require adjustment. We cannot express an opinion about, or advise upon, the condition of uninspected parts and the Valuation Report should not be taken as making any implied representation or statement about such parts.
Our valuation is provided only for the purpose agreed with the instructing client and will be for the sole use of the client. As such, it is confidential to the client and his professional advisers. We accept responsibility to the client alone that the report has been prepared with the skill, care and diligence.
Neither the whole nor any part of the Valuation Report may be included in any published document, circular or statement nor published in any way without our written approval of the form and context in which it may appear. We undertake all services only on the basis of these terms which shall apply to the exclusion of any other terms and conditions which the client may seek to impose.
The Valuation report derived will be based on the information provided the company and gathered by means of inquiry. The computation and analysis intends to provide reasonable grounds for valuing the business as a going concern. The reader is expected to exercise professional judgement when using the report to initiate any business transaction or relationship with the company.
FREQUENTLY ASKED QUESTIONS
- 1. How precise will be the valuation?
- Valuation will determine the expected price that a buyer may potentially pay for your business. However, the real price will be determined when the business transaction is closed and value that the buyer has paid for the business.
2. What if the transaction could not take place at the estimated value?
- Valuation figure determined is to provide you with a broad estimate based on many variables. It does not confirm the price your business will be sold at, however, gives best estimated value of your business.
3. What are the factors that determine value?
- Some of the factors that determine the value of the business are Cash Flow, Customer diversification, Strong Key Management team, Company size, Industry outlook, Business Growth prospects, Competition
4. Will the value of my business be shown to all the visitors to the website?
- No. Your business valuation is for your reference only. Only, if you want us to share the value of your business on your listing, we will do so.
5. What is the validity period of valuation?
- Valuation is generally valid only for the valuation date indicated on the report and for the purpose stated. The businesses are recommended to conduct valuation every 6 months
6. Does the valuation consider future prospect of my business?
- It is important to consider future prospect of the business from both Sellers as well as Byer’s perspective. Seller is interested to show the business potential in terms of growth prospects and as a result wants a higher business valuation. Whereas, the Buyer wants to evaluate the risks and opportunities going forward.
7. Does the valuation include intangible assets?
- Intangible assets like goodwill, brand, trademarks and copyrights, intellectual property, royalty, software rights, etc. plays an important role in valuing a business. These are genrally valued at acquisition costs
8. Does the valuation reflect off-balance sheet liabilities?
- If the business has significant amount of off-balance sheet liabilities, such as derivatives transactions, long-term lease agreements, the valuation should reflect these off-balance sheet liabilities.
9. Will the valuation consider the potential to expand capacity or similar business flexibilities?
- Yes, the valuation shall consider the potential to expand capacity or any such business or operational flexibilities that is offered by a particular business.
10. How do you value a running business and how does it differ to a dormant business?
- A running business shall be valued as a going concern. The valuation here shall be estimated based on its current cash flow, growth of cash flow, value of assets and liabilities and its capital investment. A dormant business on the other hand generally does not have cash flow or the cash flow does not originate from business operations, for example rent of property. In such cases the valuation of the firm shall be estimated considering market value of its fixed asset and adjusting that for any liability.
11. What if all documents are not available for the valuation of a business?
- To conduct the valuation of the business, we will require all the necessary documents listed in this section.
12. I know what is my business worth, why do I need a professional valuation?
- The business valuation can help you improve the way you manage your business let alone to determine the Business worth. A business valuation can help you achieve the following: Determine asking price of your company, strengthen your credibility, track your goals, investment requirements, and many more
13. How to value business when brand is popular in comparison to sale and is decades old enjoying repute?
Valuing goodwill or a brand developed in-house (i.e. by incurring marketing expenditure, ensuring quality and meeting consumer expectations and perceptions) is always a challenge.
The brand in order to have implications for valuation of a firm/business shall pass through two tests:
(1) the brand must result into higher sales for the company compared to its competitors
(2) per unit price of the product that the company realises must be higher than similar products offered by competition.
If an in-house developed brand passes these two tests, a brand would have significant impact on the value of the firm.
For the actual inclusion of brand-equity in value of a firm, the firm is valued using either the DCF or CCM (comparable company method) and some premium such as 15-20% is added to the value of the firm.
14. Who will perform the valuation?
- The valuation will be done by Independent Third party – see profile here
You can get your Business Valuation done through our verified independent valuation expert.Mayank Patel, CFA
B. E. (Electrical), M.B.A.(Finance), PGD in Treasury & Foreign Exchange Management, CFA(USA)
He has more than nine years of experience in banking and financial services and has completed eight years as an academician. He has also received CFA charter from CFA Institute, USA. His academic interests are financial markets, asset pricing, behavioural finance, risk management and quantitative methods. He specializes in the area of investment research, corporate finance, business valuation and financial derivatives. He has presented a numbers of papers during various conferences and has also attended workshops on econometrics, computational finance and advanced valuation. He has keen interest in entrepreneurial activities. He is an ardent follower of geo-political economy, and developments in the field of education.
To get the right value of your business, call +91-8000 422 133 or email firstname.lastname@example.org
Almost every business decision in one way or the other relies on valuation. When analysing whether to invest in an asset, project or a business, the value of the asset or business is assessed and compared with the cost of acquiring it. Financing the investment also requires valuing debt or owner’s equity and deciding an appropriate mix of the two. A businessperson needs to understand what creates value in a business venture and what causes the value of the business to change from one period to another. Understanding the drivers of value for a business are critical for maximizing the value of the business.
Valuation plays a key role in acquiring a business, as the buyers are attracted to a particular business because they believe it is undervalued. They are also interested in how much additional value they can create by restructuring the business and running it efficiently. The buying firm or the individual has to decide on the fair value of a target firm before making an offer, and the seller of the firm has to determine a reasonable value of the business before accepting or rejecting an offer.
There are several perspectives of value and variety of valuation approaches or methods. Intrinsic value – the value of a business or asset given a hypothetical complete understanding of its business characteristics – is a good starting point to understand valuation. The other relevant valuation concepts are going concern value – value of a company assuming continuation of its business; liquidation value – value if the company is dissolved and its assets are sold individually and proceeds used to pay liabilities; and fair value – the value at which a business would change hand between a willing buyer and willing seller when the former is under no compulsion to buy and the latter is under no compulsion to sell. A very interesting concept of value is investment value – the value of a company for a specific buyer accounting for synergies that the buyer can generate by acquiring the company. Investment value, here is based on the buyer’s requirement and expectations.
The general approach to value a business is to compute the present value of its future cash flow. This cash flow could be in the form of dividend, free cash flow or residual income (the term popularized by Stern Stewart & Co is Economic Value Added), applying a discount rate that reflects the riskiness of the future cash flows. Valuing a publicly traded, stock exchange listed company is less of a challenge compared to valuing a start-up or/and a privately held company. The cash flow of a public company is well-known, established and predictable. Cash flow for a start-up is uncertain and unpredictable. Cash flow of a private company may be certain and predictable but unknown. Two other approaches of valuation are estimating the value of the subject company in comparison with the value of a similar company, and estimating the value that can be realized if the company is immediately liquidated.
Business valuation has multiple uses. Some of the applications of valuation are - to render fairness opinion, to evaluate effectiveness of a business strategy, to communicate with analysts and shareholders, to buy and sell shares, and to compensate managers for their performance.
LIST OF DOCUMENTS FOR VALUATION
Audited financial statements
- Last 5 financial years Balance sheet, Profit & Loss Account, Cash flow Statement – with schedules and accounting notes.
- Auditors report for the last 5 financial years.
- Management discussion and analysis if available for last 5 years.
Unaudited quarterly financial statements up to the month of valuation Balance Sheet, and Profit & Loss Account.
- For example, if the valuation exercise is being performed in the month of February, we shall need unaudited quarterly financial statement for first (April to June), Second (July to September), and third (October to December) quarters.
- Shareholding pattern/partnership stake (if Private Ltd Company / Partnership / LLP).
- List of top ten customers with their contribution to sales (in percentage).