Business Valuation Digest #13
IdealCap Valuations
Independent and objective company valuations for every business situation...
Premchand Kurup asks: Is business valuation a science or an art?
IdealCap's answer: This is a great question. Thanks for asking, Prem. Valuation is a fascinating interplay between the precise world of numbers and the nuanced realm of judgment. Let's break it down:
On the science side, it's all about the numbers - quantitative and methodical. We're talking about solid financial analysis, mathematical models, and methods steeped in financial principles. Think discounted cash flow analysis, comparable market data – these are your hard facts and figures. It's like the skeleton of valuation, providing a structured, standardized approach. This part is black and white, driven by data and established methodologies, like those the AICPA or ICAI sets out.
Now, the art aspect is where it gets intriguing. This is the realm of judgment and interpretation. Every valuator brings their unique perspective, reading between the financial lines and understanding industry subtleties. It's about making informed estimates on future growth and discount rates. This side of valuation is more subjective, fueled by experience, expertise, and, to an extent, intuition.
So, in essence, business valuation is this intriguing blend of the concrete and the abstract. It's a dance between the empirical and the interpretative. It is both firmly rooted in scientific principles and quantitative analysis, and also spread out into the realm of interpretation and subjective judgment. This duality is what makes valuation such a compelling and complex field. It's not just about the numbers; it's also about how you read and interpret those numbers in the context of each unique business scenario.
Yahoo Finance
This guide provides key frameworks and models for investment professionals for enhancing their analysis of evolving and volatile crypto markets.
Value Research
This piece concisely encapsulates the valuation guru's valuation principles.
The Kford Group
Be wary of the risks of using EBITDA multiples for business valuation and the importance of professional expertise for accurate financial analysis.
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USA TODAY
This article explores the critical role of brand valuation in today's technology-driven market, where consumer preferences shift towards phygital experiences. It emphasizes the balance between product quality and brand identity for driving sustainable growth and enhancing market capitalization.
The Times of India
The Indian capital markets regulator, SEBI, has raised concerns over ambiguous valuations in recent IPOs, pledging to investigate high premiums and emphasizing its commitment to market transparency, rather than influencing timing or issue advice.
JobsDB
That's all for this edition of the digest. We trust you found the content both engaging and informative. Happy reading!
In each issue, we handpick a selection of articles that we believe will resonate with your expertise and interests in banking, investment, and valuation.
The Valuations Team
Ideal Capital Management Consultants LLC
Fractional CFO | UAE Corporate Tax & ESG-Driven Finance Strategy | Helping Businesses Make Sustainable Financial Decisions | Personal Finance for common man |
1 年Good section and it will keep reading alive and interaction engaging. My question is: Income Statement and Balance Sheet are given the first preference in Valuation. How come Fund Flow Statement and Free Cash Flow measure are ignored? Is it because of lack of available information to compile or it will reveal too much to be comfortable for vested interests' valuation?