In the present article, I'd like to inform you regarding valuation of the company, provide real examples, useful facts.

Valuation stages

Valuation of the company (business) is the procedure that requires special knowledge; it is performed in several stages.

1. Consultation

First step is - to contact the valuator for the consultation; mentioned service is absolutely free. Specialists will inform you regarding all valuation peculiarities, timing/cost, and will also be able to specify in details requirements and conditions.

2. Conclusion of the contract for valuation services

Next stage will be the conclusion of the contract for evaluation services. Document specifies rights and obligations of the client and the specialist, the agreed terms and cost, and, if it is necessary, additional conditions for the valuation.

For example, there are situations when the client doesn't have certain documents to perform the complete and successful valuation, in such case the valuator can perform the restoration of papers. This procedure is also specified in the contract.

Regarding requirements for the valuation, we should notice purposes. Peculiarity of any valuation is that the procedure is performed strictly in accordance with the predetermined purpose. This information is included into the valuation report. This document has legal force and is required to resolve legal situations or to complete transaction.

Let's consider an example. You order the company valuation for the purpose of sale, later you take the decision to use the valuation report for the optimization of the taxation. Unfortunately, it isn't applicable. For new purposes the one more valuation should be ordered. That is why I advise you to discuss in advance all conditions of the valuation with the valuator at the consultation stage.

3. Collection and analysis of the information

After conclusion of the contract, the valuator starts work. The client is required to provide the package of documents, namely:

• documents confirming the registration of the company;
• Charter;
• technical documents and those in which is recorded the owner of the company;
• balance sheet and financial report reflecting activities of the company for certain reporting periods;
• statement prepared on the basis of balance sheet;
• business plan regarding the development of the company.

4. Selection of approach and cost calculation

After the investigation and the analysis of the documents, the valuator determines the most rational approach for the valuation (there are three methods: comparative, property and income). Each approach comprises its own principles and the valuation strategy. Using knowledge and experience, the specialist will make required calculations and determine the market value of the company.

5. Meeting with the client

After receipt of the required data, the valuator meets with the client in the convenient format (online or offline) and provides results. If the client is satisfied with everything and there are no complaints, the specialist starts the next stage of the valuation – preparation of the valuation report.

6. Preparation of the valuation report

The valuation report is a document that confirms the fact of the valuation. It indicates the whole information of the market value of the object, as well as of the valuation purpose.

If you have any questions, you can contact me or my team for free consultation! We do not perform the valuation under templates; each project is performed individually, based on the conditions and requirements of the client!