Depending on the sector, the company’s history, and its prospects, as well as similar transactions that have taken place, we employ suitable financial valuation and modeling methods.
We utilize distinct approaches to financial analysis in order to determine the value of the company.
Asset based Approach
Asset-based methods assume that the value of the company corresponds to the value of its assets. The net asset value method evaluates the company based on its shareholders’ equity. Goodwill methods consider the adjusted net asset value while also taking into account current and future profitability, as well as intangible assets.
We apply comparative methods, which suggest that a company is valued similarly to its peers based on closely related criteria.
This includes known financial valuations, such as reference transactions in the mergers and acquisitions market or stock markets.
We employ methods like the price-earnings ratio and multiple methods, such as cash flow capacity, gross operating surplus, or revenue.
Cash Flow Approach
Furthermore, we utilize cash flow methods, which prioritize the company’s prospects over its assets or the value of its peers. The Fischer method and its variations calculate the value of the company as the present value of the cash flows it will generate for its shareholders. The economic cash flow method, on the other hand, values a company based on the present value of the net cash flows it will generate in the future.
We collect, analyze, and integrate past, present, and prospective financial information, as well as the business plan, into a dedicated economic model. The model and calculation assumptions used to determine the value are documented and explained. Finally, we present the results of the company financial valuation and modeling.
These elements provide an essential foundation for considering the future of a company and engaging in negotiations with third parties.