Today, to make effective management decisions, the owners and management of an enterprise often need information about the value of the business. This article will analyze the best useful solutions for providing an accurate assessment.
The foundations of the business evaluation
In today’s world, to conduct a business rationally, it is necessary to know its market value. Without it, it is impossible to carry out many operations: purchase/sale transactions, mergers of companies, the attraction of investments, etc. Whatever business it is, it has its value. Every property, every share – everything in business has its price. Therefore, business valuation implies a procedure for determining the market value of a business, where the object of valuation is an enterprise (or other organization) as a business or property complex, as well as shares (or their package), a share in the authorized capital of an enterprise, a trademark, etc.
Business evaluation is carried out to:
- improving the efficiency of the current management of the enterprise;
- determination of the value of securities in case of purchase and sale of shares of enterprises on the stock market;
- determining the value of the enterprise in case of its purchase and sale in whole or in parts;
- enterprise restructuring. Conducting a market assessment is expected in the event of liquidation of an enterprise, merger, acquisition, or separation of independent enterprises from the holding;
- development of an enterprise development plan. In the process of strategic planning, it is important to assess the future income of the company, the degree of its sustainability, and the value of the image;
- determining the creditworthiness of the enterprise and the cost of collateral for lending.
Modern enterprises often have complex organizational structures. In addition to tangible assets that have a very specific value (real estate and movable property.), There are intangible assets—for example, copyrights, registered trademarks, patents for inventions, licenses, and goodwill of the company. The assessment takes into account the total value of all business assets – both tangible and intangible.
Useful digital instruments for automated business valuation
Today auditors can use specialized computer programs to automate the process of financial analysis. At the same time, programs from different manufacturers differ in the user interface and development tools, the range of tasks to be solved, the number of available analysis methods, the degree of detail of the output data, and some other characteristics. So, we have determined 3 leading solutions for business valuation:
- Virtual data room
The key to a successful business valuation is a high-quality information base. The information needed for the assessment is collected from various sources. Therefore, auditors or companies implement top choice virtual data room software to arrange a single secure database and collaborative environment.
It is a proven, methodically verified software solution, with the help of which, based on the initial information, the necessary financial indicators are automatically calculated, and their specific values are interpreted, which allows us to draw useful conclusions.
- Business&Asset exchange
The service allows you to analyze the value of the business and generates an additional analytical report on business valuation. For a more realistic assessment, the program can adjust the value of fixed and intangible assets of current and forecast reporting.