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What do you value your company at?
It’s one of those Dragon’s Den questions that is asked for a reason. You need to know what your company is worth, especially if you intend to sell.
Find out how we can help you answer this question.
You might be wondering if there is a secret formula used to value businesses,
The answer is quite simple, there isn’t.
Business owners will adopt several methods to value their company, especially if they intend to sell, with the aim to value it as highly as possible.
The simple goal here is to maximise the potential value of your business.
As a business owner intending to sell your company, you may opt for an asset based method.
This means you will calculate your company’s value based on its net asset value.
Put simply, the net asset value is your company’s assets less company liabilities.
Market value valuation does what it says on the tin- your company’s value is calculated based on the going rate within the market you trade in.
If you have shares in your company, a market value valuation will usually be determined by multiplying outstanding shares in your company by the current share price.
As we have established, business valuation is not limited to a single method.
In short, there are many factors that need to be considered including the reason for valuation. In most cases, the final number is based on developing the right perception around the business and maximising that.
You will also need to consider the legal and business operational side in valuing your company.
This is where MVC Accountants can help.
We have experts in accounting and legal to help you make the business valuation process an easy one.
Get in touch to learn more today.
Keywords: Business valuation