Accurate valuations are one of the most important business tools available. They are a key part of most financial transactions informing decision making, facilitating planning and strategy as well as quantifying value for tax, regulatory and litigation purposes.
Valuations can be a complex process and need to be rooted in solid valuation methodologies and rigorous financial calculations. However, they are more than a number crunching exercise and to really add value and insight they must be combined with sound judgement and commercial awareness.
As advisors who are close to our commercial clients, we never undertake valuations in a vacuum. With depressed values and lack of confidence in the market we take a rational approach when undertaking a valuation. We assess all the relevant factors from future profitability and cashflow, current financial position including review of assets, liabilities and debts, and historic performance to more intangible off-balance sheet items such as the strength of the management team, goodwill and market share.
Valuations require detailed financial analysis combined with an instinctive ability to interpret all the relevant factors and come to a commercial judgement which captures the full picture. We have worked with many of our clients when values were soaring and also when values collapsed to provide a valuation service they can confidently rely on.