Company valuation is done to identify the market value of a company. The market value represents optimum values where a motivated buyer and seller are met. It is important for shareholders to now current company value for sales/partnership decision-making process. Additionally, although shareholders have no plans regarding share sales, they may apply business value increasing strategies to analyze value changes and evaluate various savings within the company.
During company valuation, internationally accepted valuation methods are adopted. Calculation method and results of each method differ.
Written Down Value approach identifies the most fundamental value of a business by ignoring intangible assets of a company such as market share, brand awareness.
Trading multiplies approach considers share sales operations of business operating in the same sector and have a similar size and makes a comparison.
Discounted Cash Flow approach considers the future free cash flow of a business and discounts future planned values from current values. This is the evaluation of the potential of the company.
VALURA system has an algorithm to evaluate various criteria including the age of business, size, potential growth, sector, etc. Accordingly, all methods are applied for business, values are separately calculated, and business value is determined by appropriately combining these calculations.
EBITDA – Earnings Before Interest, Tax, Depreciation, and Amortization. This concept represents the profit of a business after operations. It is used for comparing two businesses for their activity performance, and this concept is valuable to compare two businesses especially operating in different countries with tax and interest rate differences.
In the simplest sense, if we don’t know the value of an asset, we cannot increase that value. The primary purpose of shareholders in all important decisions in a business must be to maximize business value. In this framework, shareholders should know the market value of a business and monitor development.
VALURA identifies value more than just brand value. Brand value is the measurement of a company with intangible assets including market recognition, human resources, and market experience. In this context, positive difference between Written Down Value and Business Value represents the intangible value of a business.
We can explain this with an example. For example, a real estate valuation expert valuated your house at $500,000. $500,000 is the value of the house and valuation experts exclude mortgage of the house. In case of a sale, if you deduct mortgage debt (this represents all financial debt in your business) from business value, for example, $100,000, shareholder value is $400,000.
Absolutely. Shareholder approach should manage the business to run for generations, however, you need to be ready to sell at the highest price tomorrow. Therefore, you need to know the value of your business, have a roadmap about how to increase this value, and make your business ready for sale.
Financial data including the previous two years than a current period and four periods for the current year are required for valuation.
Sector comparison data are calculated from current financial data of 72,000 companies in 107 countries.
Ideal balance structure is extremely important and valuable for the healthy growth of a business, efficient use of financial resources, and equity capital optimization. Businesses need to analyze their equity capital and external resources levels. Ideal ratio changes between sectors and countries. However, 1 unit equity capital - 2 units external resource, and 3 units asset size is accepted as ideal for various businesses. Please refer to Financial Performance Analysis for balance efficiency.
VALURA system mainly analysis financial data such as balance sheet and income table. Additionally, there are the different analysis of operational, strategic, and projection data. The important point here is to enter complete, updated, and real data demanded by the system. Your director will guide you about the required data.
Future projection is extremely important for discounted cash flow valuation as well as business budget and objectives. Projection should be as conservative and as realistic as it can. Additionally, the projection should comply with previous performance and business resources (financial, operational, and human resources) should be considered to increase the chance of success. Your director will provide the necessary support.
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Purpose of Value Increase Consultancy is to increase the value of your company by making your business more corporate, profitable, growing, and attractive for investors. Please request information for program details to receive support on this matter.
When the business is ready for sales and there is value maximization, we receive from our network from 73 countries for investment/sales process management. Under this framework, investment documents created for the company are introduced to 50-150 investors in the national and international arena and we work on agreement conditions. These investors can be financial investors with private equity funds as well as global and local strategic investors.
Human Resources is the most valuable and strategic resource of a business can have. You can benefit from our Human Resources Score report. This report includes Corporate Happiness Score and Manager Assessment Score.
Absolutely. You may already make an agreement with the investor. There are important details in this process as well. Performance payment, capital increase, share sales, dividend distribution, vendor finance should be organized in detail. We can support you with our experienced team and enable you to create the most accurate and advantageous structure for you.
We wish that we could answer this question with just one sentences. Profit is the financial output of well-planned and well-executed strategy at the end of every quarter. By receiving Value Increase Consultancy service, you can have a more profitable and more valuable business.
Increasing your company value will at the same time enable you to make systematic improvements on various topics. The tip of the iceberg can be summarised as focused strategies, corporate governance, and profitable sustainable growth. Please consult our VALURA Directors regarding support in this matter.