Business valuation service New Jersey is a practice and a set of tasks that determine the monetary and market value of a company or a business. Valuation of a business is done for multiple reasons such as your need to sell your company due to retirement, divorce, health, reduced cash flow, etc. In all these cases, you need to provide the value of your business. Are you looking for business valuation services New Jersey? ThomasRoss Financial Group is here at your service! We also provide brilliant business start-up services New Jersey.
What are the Primary Business Valuation Methods?
The business valuation of a company or a business, when performed as a going concern, is mainly approached via the following methods:
- Relative Valuation – Market Approach
- Intrinsic Valuation – Discounted Cash Flow Approach
Market Approach
The market approach is a type of relative valuation, which is often used for the process of business valuation. It comprises of Comparable Analysis and Precedent Transactions.
Discontinued Cash Flow Approach
Discounted cash flow approach is a type of intrinsic valuation, which is an extremely elaborate and in-depth approach to the business valuation process.
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The Three Main Methods of Business Valuation
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Comparable Analysis
This is a relative valuation method in which we evaluate the present worth of a company by comparing them to other similar companies. We look at trading multiples like P/E, EV/EBITDA, and/or other ratios. This method is a very common business valuation approach as it presents the current value and can be calculated rather easily.
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Precedent Transactions
This is another relative valuation method in which we evaluate a comparison between a company and other recently sold companies of the same industry. These transaction values are essential for mergers and acquisitions transactions. However, this method is not used as often as comparable analysis, since the data can very quickly lose its value, as with time it may not continue to prevail as the current market value.
This is why we suggest you avail our business valuation services New Jersey so that you can always remain up-to-date with the current market value of your company. At ThomasRoss Financial Group, you can also opt for excellent business start-up services New Jersey.
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Discounted Cash Flow Analysis
This is a type of intrinsic valuation method in which we forecast a company’s unlevered cash flow and discount it back to today’s value. It requires the most substantial amount of assumption, analysis, and detail. The method often produces a result that is the most accurate valuation of a business.
Business valuation is of utmost importance and shouldn’t be neglected or done by the owner himself, as the results may end up being biased in nature. Contact us to avail a team of professionals who will evaluate the accurate value of your company with total ease and at affordable prices!
