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Private
Equity
In recent years, private equity has emerged as one of the fastest growing investment categories in the global financial landscape. This investment in non-traded equity presents a significant challenge from a valuation perspective. To ensure an accurate and independent valuation, it is essential to identify risk drivers and validate business plans and financial statements. Value & Risk has extensive experience in the ongoing valuation of this asset class, facilitating a robust and independent valuation process.
Cashflow pricing method
The DCF method is used when the company being valued generates positive cash flows from its operations over a long period of time. The enterprise value is determined by calculating the present value of the expected cash flows.The discount rate is derived from a peer group of comparable companies.
Peer group method
If the target company has an operating business or a plausible business plan, the peer group-based valuation method can be used. The key assumption is that the business will continue to operate. In the peer group method, the share price of the target company is calculated on the basis of the share prices of comparable companies using multiples based on financial ratios.
Net asset value
If the company cannot be valued using other methods, the valuation may be based on the intrinsic value of the company. This is the case where the available historical financial information is predominantly negative or incomplete and there is no plausible business plan. The basis of this approach is the adjustment of the book value.
