Business valuation

The evaluation of companies and businesses is the process used to determine the value of the organization, whether for the purpose of total or partial sale of the business, fundraising or to understand the current health situation of the company.

The objective of the evaluation is not only to quantify the current value of the company, but through it to create a model of monitoring and dynamic management of the generation of value.

To this end, we combined the discounted cash flow method with the real options method as an effective tool to aid the traditional investment analysis model, with a view to improving decision making.

At the end of the evaluation, an overview of the business in its financial and accounting aspects will be provided, as well as a stock monitoring tree for the next 5 years.

This scenario will also allow the entrepreneur to develop strategies of how to improve business performance, optimizing profits and operational techniques.

The models and techniques used for the evaluation of a company are varied, depending on the scenario and situation of the organization, in addition to the specific demands of each business. Despite the use of some apparently simple procedures, the evaluation of companies must take into account objective and subjective aspects, transforming this service into a complex and highly technical process.

The evaluation examines the most diverse aspects to correctly estimate the value of the enterprise:

  • Purpose of evaluation: purchase, sale, merger, settlement and planning
  • Economic context
  • Social context
  • Political context
  • Techniques and models used in the evaluation

Although it is not impossible to learn methods of evaluation, it is best to hire a consultant with qualified and experienced professionals to perform the procedure.

This is because the result will be more reliable and will not have bias of the evaluator, which usually when the evaluation is carried out by someone from within the organization.

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