Sep 21, 2019

Valuation

Valuation 

· Definition

· Why Valuation Services are needed?

· Three Types of Approaches used by us

· Our Services

Definition:

Valuation is a process in which the intrinsic and fair value of a(n) asset, company or project is determined by making use of latest financial techniques and theories and on the basis of comparing the same with similar assets or based on current value of variables on which the future return on the asset is dependent. The general principle in valuation is taking into consideration of industrial environments, as well as economic entities. The skill and art of valuation in selection of the proper valuation model lie with understanding of how to make use of such model.

Why Valuation Services are needed?

1)  Major and block transactions and transferences of shares of companies and projects

2)  Pledge a company’s shares as collateral for taking out banking credit facilities

3)  Enforce supervising and legal institutions to determine the company’s worth

4)  Understand actual value of a share for transaction purpose and administration of an active investment portfolio

5) Transfer ownership

6) Offer initial shares

7) Merger and acquisition

8) Evaluate wealth and create value

Three Types of Valuation Approaches used by us

1) Income Approach: This is also called discounted cash flows, which is based on cash flows discount models. This approach is applied to determine the current value of future cash flows attributed to an asset, company or project. Some of its methods include: “Dividend Discount Method”, “Operating Cash Flow Method” and “Free Cash Flow Method”.  

2) Market Approach: In this approach, a company’s value is estimated by comparing its value with the value of similar companies in the market. The concept of barometer is used for valuation in this approach. The industry barometer for each ratio and indictor represents the criterion of such indicator in calculations, and the company’s value is determined by comparing its income and cash flows with those of other similar companies.

3) Asset-Based Approach: In this approach, the intrinsic value of a company is determined by current value of the company’s assets minus current value of liabilities and equities of holder of privileged shares, or by calculating the replacement cost of the company’s assets minus their physical and economic depreciation. This approach is best suited for valuation of companies with no intangible and off-balance-sheet assets and rather with current assets and liabilities.

Our Services

 Being supported by our experienced and skilled valuation specialists, we are ready to carry out fair valuation and determining the prices of types of securities and projects by using the most modern and appropriate models of valuation.

1) The skill and art of valuation in selection of proper valuation model, together with understanding of how to make use of such models.

2) Valuation of types of projects and companies according to the client’s request.

3) Valuation of securities in block transactions of companies and projects.

4) Valuation of types of securities for transference of ownership, initial offering of shares, merger, acquisition and spinoff.