How To Evaluate A Company

Table of contents:

How To Evaluate A Company
How To Evaluate A Company

Video: How To Evaluate A Company

Video: How To Evaluate A Company
Video: 3 ways to value a company - MoneyWeek Investment Tutorials 2024, December
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In some cases, an entrepreneur has to evaluate his business. Such a procedure is required if you are preparing a company for sale, choosing an object to secure the received loan, getting rid of some assets due to the threat of bankruptcy, and so on. To evaluate a company, you will need to analyze its activities and assets.

How to evaluate a company
How to evaluate a company

It is necessary

  • - financial documents of the company;
  • - information about the assets of the enterprise.

Instructions

Step 1

Analyze the company as a single property complex. Consider the tangible assets that are used to conduct the business. This includes production and office premises, plots of land, work equipment, raw materials, finished products, industrial equipment.

Step 2

Conduct a separate appraisal of the properties owned by the company. This category includes not only buildings and building structures, but also land, perennial plantings and water bodies. As a rule, the assessment takes into account not only the property itself, but also everything that is inextricably linked with it.

Step 3

Consider in the estimates the value of the company's movable property: mechanisms and work machines, computers, vehicles that the company has on its own.

Step 4

Move on to the assessment of the intangible assets of the enterprise. One of them is your company's business reputation. Legally, this asset is rather difficult to identify, therefore, as a rule, it is assessed in conjunction with brand names, symbols and other signs that in a certain way affect consumer behavior. When evaluating intangible assets, the location of the enterprise, the period of its operation in the market and the consistency of the clientele are taken into account.

Step 5

Analyze the financial component of the assets of the enterprise. Usually this category includes the securities at the disposal of the company. The most expensive are the shares that are included in the controlling stake. The assessment is based on the current price of shares prevailing in the market, taking into account also the forecast of changes in the value of securities.

Step 6

If the company has projects that are carried out with investments, also include them in the assessment. Analyze the feasibility and profitability of such projects, guided by the business plan and current indicators.

Step 7

Based on the results of a comprehensive assessment of the company, draw up a final report, breaking it down into separate items. The report must contain all the main parameters related to the assessment of tangible and intangible assets of the company. Such a document will allow you to immediately get an idea of the real value of the enterprise.

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