It is a question that generates all kinds of resolutions because many internal and external elements of the organization, social, economic, technological, legal involved, etc. In order to answer this question there are companies designed to provide users with a full assessment of society, there are even online Internet pages where companies such as Mercopym are valued. Fundamentally this assessment is essential in cases of buying and selling operations, where the owners seek to maximize the value of the company.
Following the classification of existing methods for assessing business it is exposed.
Static valuation method is a traditional method that tries to calculate the value of a company through the sum of the value of heritage, therefore supports the premise that business value is in its assets. This method does not take into account future developments of the company, therefore it is considered static.
Dynamic valuation method, unlike the above method it is not based on the balance when assessing the company, but consider that the company is moving. So they keep in mind the future basing the valuation of the company assets present and future growth opportunities.
Within this classification we can find two very interesting methods:
- Method of Discounted Cash Flow
- Method of dividends
compounds methods, is a method that is not commonly used. Forms a mixture of the previous two, ie, provide a static and a dynamic perspective.
Method of valuation multiples, ratios is to find where the value of the company with another variable so that later can be compared with other companies of similar characteristics relates. All this in order to make a decision regarding the purchase or sale of an organization. In this section we note that the most commonly used multiples are:
- Market value over book value
- EV / Ebitda
- EV / sales
- EV / EBIT
What do you think is the best method of business valuation shall believe?