Business valuations are required for a number of reasons including acquisition, restructuring, sale, merger, estate duty, litigation, collateral for loans and forced shareholder exits etc. Many business people can apply a Price/Equity ratio to a business or a turnover factor for an industry and determine a corporate value. We however believe that the valuation process demands a far more in depth and scientific approach. Our valuation model has been designed and tested by experts in the field of valuations, and is based on projected sustainable free cash flows.
In essence this means that the company results are reviewed and adjusted to determined what could be expected (based on history and future projects) as a sustainable profit flow. Various risks and growth factors are considered, and using this sustainable profit, the company cash flows are projected into the future to an expected survival date.