The most common method of valuing companies is the discounted free cash flow, there are several ways of doing this that are adapted to the characteristics of each company, among these are the cash flow of the firm, the cash flow of the shareholders and the adjusted present value (APV).
Another complementary way of estimating the probable sale value of a company is the comparable multiples methodology, in which it is observed how much companies with similar characteristics are being sold or have been sold for, and in this way it is possible to infer the value of the company under study.
It is often necessary to adapt the observed multiples to be used, making adjustments for size and risk.
The valuation of companies is especially important in the process of:
- Purchase or sale of companies, mergers and acquisitions
- Negotiation of shares between current partners of a company
- Judicial and arbitration
- Business administration, strategic planning and value generation management
- Raising capital and bringing in new equity partners
- Successions and divorces
Our Consulting Partners have postgraduate degrees in finance from top universities and are certified in advanced valuation. In addition, we have developed the best models and have paid databases to obtain information on comparables and precedent transactions.
For more information please contact us.