Valuation of companies
It is the process by which we seek to determine the market value of a company or group of companies.
- Relieve the company to selectively identify key value drivers / risks;
- Investigate the market outlook in general and the company in particular;
- Make projections of results and expected cash flows;
- Compare the current and expected performance with that of other companies in the industry;
- Determine the value through the method of discounted cash flow and use of multipliers usual industry / segment;
- To analyze these results in one or more environments. To determine the sensitivity to changes in the value of the main drivers of the company;
- Conduct a strategic analysis (EJ: SWOT).
The main reasons for a valuation are:
- Provide information to determine whether or not to initiate a sale process;
- Lack of agreement between an outgoing partner and other remains;
- Difficulty in determining the value of a company which will be purchase;
- Determining the relative value of two or more companies on mergers;
- Have solid elements and justify the value in case of a bargain purchase / sale has already started.