reasons of corporate valuation


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reasons of corporate valuation

  1. 1.  REASONS FOR VALUATION OF BUSINESS ENTERPRISE Prepared by:- Ritu Sharma Sakshi Singhal Shahida Anjum MBA (finance)
  2. 2.  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 empirical evidence.
  3. 3.  Purpose of valuation Stage of business Past financials Expected financial results Industry scenario Corporate valuation depends upon…
  4. 4.  …  Business /assets Valuations for Financing  Sale of a company  Exit Strategy Planning  Buy/sell Agreements  Estate and Gift Tax  C to S crop Conversion
  5. 5.   Litigation Support  Insurance Purpose  Intellectual Property Valuation  Foreclosures  Divorce/Estate Settlements Continue..
  6. 6.   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 improved. Cont…
  7. 7.   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. Cont…
  8. 8.   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 conversion. Cont…
  9. 9.   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. Cont…
  10. 10.   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. Cont…
  11. 11.   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. Cont…