Corporate Valuations – Valuers Insight Corporate Valuations:About Valuation:Valuaers Insight

Valuers Insight

Key Takeaways

  • Minimize bias in Valuation Process
  • Evaluate the stage of Business cycle
  • Do Sanity Check by different method
  • Justify business model and key assumptions
  • Substantiate data

Where things can go wrong

  • Excess, Cash and Non Operating assets
  • Transperency & Corporate Governance
  • Accounting Practices
  • Terminal Value
  • Cross Holdings
  • Legal environment and Tax Implication
  • Intangibles & IPR's
  • Subsequent Events
  • Off Balance sheet Items
  • Discounts & Premiums

Reconciliation and Value Conclusion

  • Different methodology shows different range of values;
  • Valuer shall consider relevance of each methodology depending upon the purpose and premise of each valuation;
  • While Selecting the final value:
    • • Subjective Weighting

      In professional judgment the conclusion is based on experience and judgment given the quality of information and the approaches applied.

    • • Mathematical Weighting

      In mathematical weighting specific weights are assigned to each approach and weighted average calculated

While concluding Value, all the methodologies must be considered and then weights applied as per the facts of the case. In other words, Value conclusion should be based on the Professional Judgement and Simple Average should best be avoided while concluding Value.

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