Valuing a company can never be an exact science as several factors of a dynamic nature exist that can affect a company’s value. Put simply, it is the sum a new owner is willing to pay for the company and which a seller is willing to accept that ultimately defines the company's actual market value - regardless of which valuation model one chooses to use.
Nevertheless, it is important to have a well-founded analysis and perceived value of the company so one can clearly demonstrate how a certain valuation level has been attained. Making a company valuation can be of interest based on a variety of needs and situations, such as:
Financial analysis: Relevant, sometimes adjusted, entry values in the income statement and balance sheet, the company’s historical development, growth and profitability forecasts, future investment needs, the company’s capital adequacy and hidden values in the balance sheet, etc.
Factors affecting value: What are the company’s strengths, weaknesses, opportunities and threats. What risks can a buyer experience with an acquisition? What are the factors that can positively affect, or on the other hand, reduce the value from a buyer’s perspective?
Benchmark: What company transactions are currently being completed in the Nordic region, EU or rest of the world in the industry in which the target company finds itself? Who’s acquiring who? Which key figures/ratios e.g. P/E or EBIT multiples, does the market pay for companies in the same industry?
The basic starting point for a company valuation is the company’s ability to earn money over time, both historically, but above all in the future. Thus, one needs to identify the company’s factors affecting the value – whether they be positive or negative.
We carry out corporate valuations tailored to your needs and circumstances. The starting point is always supported by: correct entry values from the income statement and balance sheet, relevant forecasts, analysis of future investment needs, a balanced view of the company’s strengths, weaknesses, opportunities and threats, and not least the perceived risk profile the company has.
Based on statistics from our own transactions and transaction databases, we validate the assessed value on what the market pays for similar companies in terms of industry, size and profitability.