Company valuation is needed and/or recommended in many circumstances.
Whether you are looking to acquire or sell a company, to lead a business in order to create higher value, to negotiate a fair deal, or to hand down your business as inheritance or a present, a formal company valuation is, in many senses, the necessary means to the desired end.
Our services in company valuations are carved for a wide variety of purposes. We serve as consultants, or impartial experts, especially for small and medium size companies. In these cases, we produce company valuations in accordance with the common rules of German legal and financial practices IDW S 1 (i.d.F. 2008). The years of experience behind us ensures our extensive coverage of nearly all aspects of company valuation.
There is not a clear, absolutely objective, applies-to-all approach when it comes to look at the value of a company. When a valuation is done, it is done to meet the needs and purposes of a specific party, be that a company, a client, a supplier, or an employee. Therefore, company valuation, by its nature, is subjective. That said, in the case of a valuation for tax purposes, the so-called objective company value in accordance with IDW S1 does exist. Rules are stipulated clearly to be followed, allowing very little room for interpretation.
Besides valuation reports in accordance with IDW S1, we also offer valuation work based on reviewing a company’s 3-5 year development plan and exercising a series of plausibility checks following recognized rules and practices. Such company valuations are of the subjective nature, to answer for the specific purposes and concerns of a certain party. In these cases, one absolute value figure is unlikely to be identified. Rather, depending on different viewpoints of different parties, the value recognition would be different. Such “value shifting” commonly reflects in business practices – the value and the price are not the same thing, and often do not correspond with each other. We use risk analysis techniques (Monte-Carlo simulation) to determine the range and the probability distribution of the company value.
To determine the capitalization interest rate is one of the most complicated and challenging tasks in company valuation work, especially for companies that are not listed in the stock market. Aside from the classic, widely known methods, we also offer more pragmatic solutions that, though less elaborate and time consuming, still provide sufficient accuracy as demanded by every individual mandate.
When carrying out a mandate for plausibility checks of a company’s business plan, we incorporate certain modern methods in the area of financial forensics, which are still rarely exercised in Germany. Applied together with the classic approach, they often reveal interesting, sometimes critical information to facilitate sound business decisions.
Our selection of the methodology of a tailored valuation always reflects the wishes and demands of our clients. As much as needed, as streamlined as possible.
We carry out our work proudly with the firm and simple principles:
Being a small boutique valuation firm, we are able to offer our services with a very attractive price-performance ratio. We may issue the reports independently, or provide services under the mandates of tax consultants, chartered accountants or solicitors. Our remuneration subjects to the requested workload, chargeable based on hourly or daily rate.