Valuation of companies and their parts is a typical task of financial consulting firms, and at the same time the most responsible one. Especially since the principles of valuation have not been legally regulated in Poland (there are only specific industry recommendations).
According to good market practice, the selection of valuation methods should depend on the purpose of the valuation, the specifics of the entity being valued, the market environment and the availability of information.
Income method / DCF (discounted cash flow model, discounted cash flow
It determines the discounted cash flow (DCF) forecast, providing the basis for the income valuation and preparation of the offer of the acquired companies, and then for negotiating the terms of the transaction and the provisions of the sale agreement. In addition, the profitability projection is taken into account by banks and partners providing financing for the transaction.
Method of comparable market transactions
It involves determining the value of shares based on juxtapositions with previously made and publicly disclosed buy-sell transactions of assets similar in nature to the asset being valued.
The method of stock market indicators
It is based on the determination of the value of shares based on the market value, presented through the stock market indices of listed companies (on stock exchanges), comparable to the company being valued, which determine the economic and financial figures describing the income and asset potential of the company. The use of the comparative method is an implication of the assumption that the capital market is a verifier of the current value of companies, despite the periodic fluctuations of trends in the market.
Adjusted net asset method
Represents the property approach to business valuation. According to the premise, a company is worth as much as the value of its assets less its outstanding liabilities, as of the valuation date. In the case of real estate assets, the appraisal report is entrusted to an authorized appraiser.
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