A Definite Guide To Business Valuation Methods

1. A Definite Guide To Business Valuation Methods Determining the market value of the business is a crucial task for different scenarios. You might be preparing for a merger, planning to sell the business, wish to know where you stand in the industry, or establish partner ownership. To get the answers, you require a business valuation. In order to determine the economic value of a business, valuation companies in Dubai use different methods like •Earnings-Based Method In this method, the value of a business is dependent on the ability of a business to generate earnings. This method is used in case the investors plan to invest in the company. Before investing, every individual/ company wishes to know the ROI they would get.the future income is calculated on the basis of past figures of profits, expenses, and sales. •Asset-Based Method In this business valuation method, the value to attained by deducting the total liabilities from total asset value. Generally, this method is applied to the acquisition transactions for determining the right purchase price of the business. •Market-Value Method This is the subject approach of knowing the value of the business. It involves the comparison of the company with the selling price of similar businesses. However, for a better comparison, there is a need for a sufficient number of businesses sold recently. The comparison includes a review of the financial statements as well as market ratios (stock prices) of similar companies. It is a great method to get an initial idea of the value of the business. In case you wish to get an accurate value of your business, consider hiring a reputed company like Ekuiplus. It is one of the best valuation companies in Dubai having a team of experienced specialists. www.ekuiplus.com