Business Valuation
Challenges in Business Valuation
Reasons for a company valuation can be corporate transactions, succession planning or recurring strategic management requirements. Depending on the information available and the necessary accuracy, Discounted Cash Flow (DCF), Capitalised Earnings or Multiplier Methods, for example, can be used.
Ultimately, all methods should result in the same value. Valuating means “comparing.” Accordingly, care must be taken to find appropriate benchmark multiples and to weight them accordingly.
Assessment Requirements
For every valuation occasion, a precise synthesis of reliable financial forecasts, the monetary quantification of value drivers and their positioning in the market as a benchmark of comparison must be found.
Forecast Uncertainty
Forecast uncertainties describe the risk that future cash flows may deviate from expectations due to unforeseeable economic or operational developments and thus reduce the reliability of the determined company value.
Documentation
The valuation process must be presented transparently through complete, clearly structured documentation.
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Our Support
We determine the value of your company using established valuation methods.
Yield curves for your needs
Yield curves are highly relevant for companies seeking to make sound financial decisions.
Valuation of bonds
Yield curves are used to discount bonds' future cash flows in order to assess their market value. Adjusting the yield curve to reflect creditworthiness, rating-related factors, and country-specific risk components is essential for accurate valuation.
Discount rates in IFRS accounting
In IFRS accounting, items are frequently depicted by the present value of their future cash flows. The prerequisite for this is the proper calculation of an appropriate discount rate. Typical areas of application include fair value valuations, the valuation of provisions as well as accounting for pension obligations.
Calculation of borrowing costs
Based on current market data, we derive risk-appropriate interest rates — using methods such as the analysis of comparable corporate bonds, or model-based approaches like Merton's structural models.
Risk Management and Hedging
Yield curves are a core component of risk management, particularly in the context of derivatives and interest rate hedging. Banks, insurance companies, and corporates rely on them to develop and assess strategies for mitigating interest rate volatility.
This is how we assist you with Business Valuations
Data Collection and Business Model Analysis
The first step is an in-depth analysis of historical financial data and the business model in order to fully understand the company's key value drivers and market environment.
Method Selection and Modelling
Depending on the valuation reason, internationally established methods such as the discounted cash flow method (DCF) or market-based multiplier methods are used to determine a well-founded and objective value range.
Plausibility Assessment and Reporting
Results are critically reviewed through sensitivity analyses and benchmarked against current industry trends, before being compiled into a comprehensive valuation report for the client.
FAQ
What is a Business Valuation?
When is a Business Valuation Required?
Which methods are suitable for a Business Valuation?
What are the challenges when it comes to Business Valuations?
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