Corporate Valuation: Todays Business need

Shailesh Prajapati , Last updated: 15 April 2021
Share

Corporate Valuation, its methods and Importance

Looking at today's Digital economy and businesses multiplying their growth by way of in-organic growth, it is necessary to step into the Valuation of a Business or Division or Unit of a Firm. Every Business has a Value which is based on present as well as Future Market of the Product. If the company have multiple product, then the value will be depend on the Valuation of the Niche Segment as well as the other product. For On going business, since we have trend of the business and prospects/projections can be arrived at, DCF method can be planned. Some time it is very easy to check the value of one similar Firm and value our business based on the Various relative measures. In that case we do valuation based on Relative Valuation method. In case of Start up company, we do not have past trend as well as future prospects, we have other method of valuation which is discussed at the end of this Article.

Corporate Valuation: Todays Business need

There are Certain Methods of Valuation, such as

NAV Method
PECV Method
DCF Method (Two stage and Three Stage)
Relative Valuation
Brand Valuation
Valuation of Startups
Economic Value Added
Market Value Added

Every author have given different approaches towards valuation. Although Regulatory if following DCF valuation method, it is necessary to know the basics of all methods.

Broadly we are focusing today on DCF, Relative Valuation, Start up Valuation and EVA and MVA. Regarding First Two methods, it is not theory only and the value is only supported by this data and not done as a primary working.