City Valuation Advisory provides valuation assistance to clients seeking to buy or sell a company, shares or an intangible asset such as a brand.
We typically work with clients to provide a valuation through the following process.
- Information basis for the valuation
In valuing a business, it is rarely sufficient to look only at the historical financial statements or management accounts. The accounts will give an important snap shot of the financial position of the company at a particular point but are unlikely to give adequate insight into the level of potential future earnings; future earnings being of primary interest to the purchaser of a business.
It will therefore usually be necessary to look at a wider set of information such as the quality of the product and services, security and quality of the customer base, key people and whether they will stay in the business, supply issues, whether major capital expenditure is required to sustain profits, what is the competition doing and so on.
City Valuation Advisory work with our clients to look beyond the historical financials when looking at value.
The deliverable for the work will typically be in the form of a report or letter depending on the level of detailed analysis and support the client needs. A typical deliverable will include:
- Basis for the valuation and assumptions;
- Key factors which in our and/or management’s opinion impact the valuation of the business;
- Details of the valuation methods applied which will typically be discounted cash flow and earnings multiple based methods;
- Benchmark data for the discount rate and earnings multiples based on comparable quoted companies and comparable transactions;
- Valuation calculations based on each valuation applied; and
- Opinion on the value of the business or asset based on the above.
- The deliverable provides information on value and is not due diligence or any form of verification. It will not provide a view as to whether or not investment should be made; such decisions always resting solely with the client.