Business Valuation Service

Business valuation is the systematic process of estimating the fair market value of a business at a given time, using scientific approaches like discounted cash flow analysis (DCF), and market and comparable valuation. Whether you are on the Buy or Sell-side of the table, understanding the fair value of the subject business is essential to protect your interest at all stages of the investment process. Investment value may be different in the eyes of one party compared to the other, which makes professional and independent corporate valuation a critical element of that investment process.

However, the fair value of a corporate business is not necessarily the same as the acquisition price, which is based on art factors like deal negotiations, and all other human-related factors. By combining both, the scientific approaches of corporate valuation along with non-scientific factors, investors can make sure that no money is left on the table, nor unnecessary cost is incurred. For further information about our business valuation service in Dubai or to receive a customized quote against your requirement, contact our team today.

Our Business Valuation Methods

Comparative / Market- Based Valuation

Comparative / Market- Based Valuation

Comparable method of business valuation estimates the economic value of a corporate entity by looking at the performance of similar businesses. Where reliable information is readily available, market-based valuation can form the basis of the primary corporate valuation method. The only drawback of this method is that it’s not always easy to get the required competitor data.

Asset-based Valuation

Asset-based Valuation

In this method, the total net-present-value of a business entity is deducted from its liabilities to estimate its overall value. Assets can include properties, machinery, stock, along with intangible assets such as brand value. As asset valuation does not consider the profitability of the given company, it is the most appropriate method for new and underperforming businesses.

ROI-based Valuation

ROI-based Valuation

A popular method of business valuation that is widely used to estimate the worth of small-to-medium business entities. It is calculated by dividing the net profit made through a purchase by its purchase cost and then converting it into percentage. This is a commonly used corporate valuation method by business appraisers when it’s required to calculate an ROI based on a selling price or to calculate a selling price based on an ROI. A higher ROI suggests a healthier business entity.

DCF Valuation

DCF Valuation

Discounted Free Cash Flow analysis is a business evaluation method that is used for established businesses who have heavily invested in the past and boasts a stable growth rate and cash-flow record. Rather than the actual profit generated, the DCF model looks at future cash flow projections. A discount rate considering factors such as interest, market risk, and inflation is applied to the estimated amount and then aggregated with the terminal value of the corporate entity to determine the overall value of the enterprise.

Multiples of Earnings

Multiple of Earnings

Like any income approach to company valuation, multiple of earnings method is commonly used by multinational businesses and those that are listed on the stock market. This method considers the Price/Earnings (P/E) ratio to calculate the intrinsic value of the business entity. Businesses within certain industries in Dubai, such as technology and IT usually command a much higher equity value than those based in sectors such as real estate and manufacturing.

Why is Up-to-date Business Evaluation a Necessity?

The basic premise of business evaluation services revolves around how much profit a buyer can make by considering the associated risks involved in a given business. Business evaluation not only helps to determine the overall economic value of a corporate business entity, but it also helps to ensure that business objectives are met, and weaknesses are identified and subsequently rectified. Listed below are some of the key reasons as to why up-to-date business valuation is a necessity:

To Buy/Sell a Business

To Buy/Sell a Business

Whether you are a buyer or a seller, it is incredibly challenging to put a price against a business. More often than not, what you might think a business is worth is entirely different from the present-value estimated by the second party. By estimating the overall valuation of the company through a proven business evaluation technique, both the buyer and seller can clearly understand the true value of the entity.

To Raise Capital

To Raise Capital

Irrespective of the business entity in question, all businesses in Dubai do require additional funding at some point. Equity capital raising is the phenomenon by which a company sells more shares to either its current investors or new ones. Under such cases, valuation of a company is a necessity as it helps potential investors to clearly understand the economic worth of your organization and make a more educated decision. It also helps in calculating the weighted average cost of capital that the company has to pay on average to all its security holders to finance its assets.

To Measure Management Performance

To Measure Management Performance

As mentioned, company valuation is not merely a tool to determine whether a given company is undervalued or overvalued in line with the current financial market. It also helps to measure management performance and also identify areas where management needs to focus on and where a change is required.

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