Corporate valuation
It is a financial and accounting method used to determine the financial position of the company in the local market, and corporate valuation is also known as the method used by financial analysts and management accountants to know the total financial value of the company, and is related to determining the value of assets, liabilities, and any other financial restrictions imposed on the company.
The evaluation of companies aims to determine their financial position, and to know the extent of their ability to continue in the economic market within their field of work, and also contributes to reaching results that provide an appropriate description of the general condition of the company.
Reasons for evaluating companies
Contribute to determining the net value of corporate equity.
It determines the value of the obligations, expenses, and debts resulting from the companies' work.
It helps determine the value of the company's shares before offering them in the financial market for trading.
It is considered a supportive method for the process of merging companies.
It provides real values for the shares of partners in joint stock companies, especially if one of the partners wants to sell his share in the company.
It assists in the process of liquidating companies with the aim of selling them, or closing them completely.
Steps for evaluating companies
Preparing a list that includes all the company's external and internal contents, taking care to add all information related to the company, whatever its nature.
Using one of the methods of evaluating companies to start developing the stages that will be relied upon in evaluating the company.
Knowledge of the company's financial position, the value of its capital, and shareholders' shares in the capital or work.
Studying the legal status of the company through the assistance of an expert in the law, to ensure that legal texts are applied to the nature of the company's work.
Terminating all financial transactions that have been suspended or that have not yet been completed, especially in the event that the company is evaluated for sale.
Provide external shareholders, clients, and clients with a brief report on the company's status if necessary, especially if they have financial rights in the company's debt.
Writing and drafting the company's evaluation report in accordance with the legal and financial rules designated for this type of report, and then handing it over to the official management in the company, or to the new owners.
Methods of valuation of companies
Net book value valuation: It is the method that relies on evaluating companies based on their net asset value, after collecting all kinds of liabilities, whether they are debts or unpaid financial obligations.
Valuation by modified book value: It is the method that recalculates the values of assets and liabilities in companies, and compares the actual and book values with linking them to a set of economic influences, such as: the rate of inflation, net shareholders' equity, and then works to adjust the book values to the values real, or actual reached.
Evaluation by replacement value: It is the method that links the capital of the company when it was established with its capital at the present time, and it depends on the evaluation of the company by relying on linking its state when it was established with its current capital. That is, it replaces the current situation of the company with its previous one, so this method is considered one of the evaluation methods that many analysts and financial accountants criticize.
TRANSLATED FROM:
تأسيس الشركات في دبيتأسيس شركة في الاماراتتكاليف تأسيس شركة في الإمارات
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Тема: Methods of evaluating companies (Прочитано 47 раз)