REASONS FOR VALUATION OF
Meaning of corporate valuation
Corporate valuation is the process
of determining The
“Economic worth” of a company
based on its Business model and
External environment and
Supported with reasons and
Purpose of valuation
Stage of business
Expected financial results
Corporate valuation depends
Business /assets Valuations for Financing
Sale of a company
Exit Strategy Planning
Estate and Gift Tax
C to S crop Conversion
Business/Assets Valuation for Financing:-
Increasingly, lenders require an independent Business
valuation prior to approving a business loan or a credit line.
Sale of a Company:- Determining the value of a business
is the first step in the process of selling a business . A formal
valuation performed by an experienced business appraiser
will determine the fair market value of your company. It will
also identify sources of value of your business that can be
Buy/Sell Agreements :- If your business has
more than one shareholder, a valuation is required
to establish fair market value of the business to
determine equity distribution.
Estate and Gift Tax :- Estate tax return require an
independent valuation. Gifting of closely business
interests require an independent valuation of the business
at the time of ownership transition.
C to S Crop Conversion :- Business planning should
have a valuation done as of the date of the change. If the
firm is sold prior to the ten year holding period, there is a
tax due on the built-in-gain of value from the date of
Litigation Support :- A business valuation is often
needed to establish economic damages in
commercial litigation proceedings; or, to determine
equitable distributions in shareholder disputes.
Insurance Purpose :- Increasingly, insurance
companies require appraisals be done on equipment
and/or businesses that are insured.
Intellectual Property Valuation :- In today’s
increasingly complex and highly regulated business
environment , the accurate and complete valuation
of intellectual property is essential.
Foreclosures :- A machinery and equipment
appraisal or business valuation is almost always
necessary during a foreclosure of a business to
determine the fair market value of all assets.
Divorce/Estate Settlements :- A business is
typically the largest joint marital assets and the most
difficult to value. A business valuation will either be
court appointed or voluntarily engaged, to facilitate
an equitable distribution settlement.