Business Valuation Service in Dubai.
14
Key concepts of Business Valuation Presented by AJITH KUMAR Emirates Chartered Accountants Group, Dubai | [email protected] | www.emiratesca.com
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Transcript of Business Valuation Service in Dubai.
Key concepts of
Business Valuation
Presented by AJITH KUMAREmirates Chartered Accountants Group, Dubai | [email protected] | www.emiratesca.com
“PRICE is what you pay.
VALUE is what you get. THEY are not the
same.”-Warren Buffet
Know the RIGHT VALUE OF YOUR
BUSINESS
By understanding WHAT IS BUSINESS
VALUATION.
‘VALUE’ is - absolutely not a fact.
‘VALUATION’ is
the process of determining the ‘Economic Worth’ of an asset
or company under certain assumptions and limiting
conditions subject to the data available on valuation date.
HENCE,
BUSINESS VALUATION IS
the process where the value of a business is derived.
evaluated on taking consideration of the companies past, present and future performance.
done by a professional valuer after which the buyer and seller may negotiate a price suitable for both of them.
Why BUSINESS VALUATION?• To identify the purchase or sales value of the business• To identifying the consideration for mergers and amalgamations• For settling disputes• For division of the business• For winding up of the company• For regulatory mandate like tax settlement, etc• For arranging investments from corporate or financial institutions
Facts on BUSINESS VALUATION
-The business value differs from person to person
-The value is subjective as it is based on several assumptions
-The book value of the business and the valuation price of business
may vary from business to business significantly.
-The final price is concluded at a price agreed by both the parties.
BUSINESS VALUATION methodologies*
-Asset Approach
-Income Approach
-Market Approach
*The Business Valuer chooses the right methodology for the business by scaling it on various aspects.
Asset Approach-Business value is based on underlying assets
-Based on principle of substitution i.e. investor will not pay beyond the useful asset
value of the business.
In the region the commonly used methods are:
-Asset accumulation method
-Capitalized earnings method
Income Approach-Based on the economic principle of expectation the value of business is ascertained.
-The business value has a very significant relation with that of the future stream of
income of the business.
-The risk is reduced by using discount rate or capitalization .
The Income Approach is followed by most of the business valuers in the region.
The methods under income approach are:-Price to earning or earning multiple-Discounted cash flow method-Capitalization of earning method
Market Approach-The business value is ascertained based on the value of the business of the similar
business entities.
-The comparison is made with companies operating in the similar economic scenario
and of relatively same size.
The commonly used method under Market Approach are:
-Comparable Companies Market Multipliers method
-Comparable Transaction multiple method
-Market Value method
Scenario of BUSINESS VALUATION IN UAEWith a powerful trade and tourism flourishing in Dubai, oil money helping to build a new Abu Dhabi and other emirates opening for business the possibilities are enormous.
With economy bouncing back from recession the buying and selling of businesses has become very active.
There are investors showing interest in buying of running business.
There are seasoned businessmen who want to sell their successful business and earn a significant reward for their business.
BUSINESS VALUATION SERVICE at EMIRATES CHARTERED ACCOUNTANTS GROUP,
DUBAI.
The business valuation division is served by experienced professionals led by the highly proficient Finance
professional, CA Ajith Kumar. The team provides realistic valuation and aids in buying or selling business at the right
price.
The significant experience and technical and industrial expertise sets Emirates Chartered Accountants Group as a specialized Business Valuer in United Arab Emirates. The Valuation Division operates from Dubai, where EMIRATES
CHARTERED ACCOUNTANTS GROUP is headquartered.
Visit us: www.emiratesca.com
Mail us : [email protected]
Call us: +971 4 250 0290
Presented by CA Ajith KumarEmirates Chartered Accountants Group, P B No.122957, Office Suite No: 503, Wasl Business Central, Near Deira City Centre, ,Dubai,UAE.
