Valuations of Companies

Valuation Methods

Knowledge of real value of company constitutes indispensable element of market economy. It is of great importance at taking investment decisions, and thus affects significantly allocation of capital. It is as well indispensable during mergers and take-overs.

As we compare valuation with market capitalisation of company it will turn out, whether company is underestimated, or maybe investors take too optimistic view on certain company`s future.

Furthermore detailed forecast enables owners and management board to know internal and external factors affecting value and gives opportunity to undertake actions increasing value for shareholders.

Please, take a look at my valuations conducted by me so far.

Property Methods

Property methods are historically the oldest conception of valuation of business entities. They take the company`s property as base for its value determination. Hence, value being result of this valuation is called property value.

Comparative methods

Comparative methods, called as well indicative or multiplier ones, except for a few defects, are fairly often used. They consist in determination of company value through its comparison with other, already valued by market ones. Just simplicity and speed of execution can be considered to be their major advantage, which can influance considerable popularization of these methods among individuals valuing small and medium enterprises.

DCF (Discounted Cash Flows)

According to DCF (Discounted Cash Flow) method a worth of enterprise is a total of cash flows, that valued enterprise will generate in the future. 100 PLN received in 5 years is worth less than 100 PLN received in a year. Therefore future flows one ought to discount to present value using proper discount rate.