INDEPENDENT | EXPERT | OBJECTIVE
How we value your business
The Asset Approach
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This is the most relevant standard of value where a company is financially distressed or is consistently loss making and rather than accept continued declines in the value of their equity rational shareholders would choose to liquidate the company and put the proceeds of sale to an alternative economic use.
The Market Approach
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The Market Approach utilises transaction data from the sale of sufficiently similar businesses in terms of size and industry sector or less frequently from public company share price data to calculate a comparable value for the subject business.
We use comparable transaction data from the previous sale of over 36,000 businesses across all industry sectors to determine business value using the Market Approach.
The Income Approach
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This approach requires a detailed examination of forecast cash flows as well as systematic and unsystematic risks facing the business in order to determine an appropriate discount rate to be used in a Net Present Value calculation. Generally speaking, the discount rate may be defined as the yield necessary to attract investors to a particular investment, given the risks associated with that investment.
Best practice requires that the Asset, Income, and Market approaches must all be considered in order to determine the most appropriate methodology to use when valuing a business.