1. Key concepts of
Business
Valuation
Presented by AJITH KUMAR
Emirates Chartered Accountants Group, Dubai | info@emiratesca.com | www.emiratesca.com

2. “PRICE is what you pay.
VALUE is what you get.
THEY are not the same.”
-Warren Buffet

3. Know the RIGHT
By understanding
VALUE OF YOUR BUSINESS
WHAT IS BUSINESS VALUATION.

4. ‘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.

5. 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.

6. 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

7. 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.

8. 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.

9. 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

10. 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

11. 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

12. Scenario of BUSINESS VALUATION IN UAE
With 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.

13. 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.

14. Visit us: www.emiratesca.com
Mail us : info@emiratesca.com
Call us: +971 4 250 0290
Presented by CA Ajith Kumar
Emirates Chartered Accountants Group, P B No.122957, Office Suite No: 503, Wasl Business Central, Near
Deira City Centre, ,Dubai,UAE.