How to know the price of a company?
- May 24, 2022
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If you are an entrepreneur, you should know the value of your business. This information is essential for you to work objectively, valuing the time you dedicate daily to your company.
In such a competitive market, understanding the true value of your company is essential for every entrepreneur, as it allows you to maintain confidence in the choices and decisions that can change the future of your business. Having this clear information can be useful when making business decisions, such as hiring a CEO or new manager, selling shares, adding partners or shareholders, entering into loan agreements or even selling the company.
Discovering the value of a company through valuation?
In the business world, when we talk about the value of a company, we are talking about its valuation. The term in English, which is already quite popular here in the country, is nothing more than a set of techniques and procedures capable of measuring the value of a company in the market.
It is based on a financial analysis that considers the nature of your business, its economic growth, all its asset and liability values, or whether it offers a unique or proprietary technology experience to its consumers, for example.
Methods that are used to calculate the value of a company (valuation)
Discounted cash flow
The method most used by the market is the so-called “discounted cash flow”. This analysis predicts how much free cash flow a company will generate in the coming years and converts these cash flows into present value, minus the inherent risks of each business.
It is essential that this work is performed by an experienced professional who knows the business, the market and has a solid foundation in finance. Wrong assumptions, fictitious projections will bring a totally arbitrary valuation to the company.
The calculation of the “market multiple” takes into account the economic performance of a company and compares it with other companies in the sector. From this, the expected return is predicted.
It is widely used to assess the value of public (public) companies.
Basically, what defines the value of a company is the equity valuation. This means that the calculation is based on the accumulated equity of the business, derived from the sum of all its assets.
This math takes into account the net worth that the company has generated since its inception.
Prevalor: the online valuation designed for SMEs and Startups
PreValor is a valuation company that offers its services mainly to small and medium-sized companies and startups. PreValor provides an accurate Valuation based on globally accepted financial metrics that also take into account the Brazilian reality.
With the reports made by PreValor, you will have the information that investors and business buyers want to know about your business.
In addition, PreValor was designed to be an affordable valuation platform for micro, small and medium-sized companies. Seeking to uncomplicate and reduce costs for its customers.
At PreValor you will find two ways to build a valuation:
-Self-assessment, in which the entrepreneur himself is responsible for providing all the company’s data on our web platform.
– And the valuation done with the help of a team of financial analysts.
All very simple, fast and safe.
Now it’s much easier to do the valuation of your company with PreValor. Visit https://prevalor.com.br/ and learn more.