Business valuation services in the UAE
The purpose of starting and running a business has changed dramatically in the modern era. Businesses are looking to increase the value of their company and increase the value of their shares. Business valuation is the tipping point when an individual or group wants to buy, sell or transfer shares in an organization in the UAE. Investors, for a variety of reasons, need to be convinced of the correct transaction value of their assets. This is a complex task requiring expert advice and support. That is why BestaxCA offers business valuation services in Dubai, Abu Dhabi, and across the region. Let’s get more information about our business valuation services:
What is a business valuation?
Business valuation is a set of procedures to determine the economic value of a company or its key assets depending on the business model. It includes a detailed analysis of receivables, bonds, loans, historical financial statements, and other debt instruments.
Objectives of business valuation
Organizations undertake business valuations for a variety of reasons, such as:
- corporate governance and regulatory requirements
- Better and more rational decision-making
- Dispute resolution in joint ventures, mergers, and acquisitions
- for obtaining business loans
- Future financial projections and profit potential
- Increasing net worth and attracting investors
How important is it to value a company in the UAE?
The valuation of a company is crucial for determining its net worth. If you are planning to restructure your company through acquisitions, joint ventures, or mergers, this becomes even more important. A higher value for your company builds the confidence of your suppliers, shareholders, or creditors during liquidation, bankruptcy, and fundraising. Knowing the true value of your company is as important as generating revenue.
Method/approaches for determining the value of a company
There are three main approaches to valuing a company, depending on the appropriateness of each method. As discussed below:
- The income approach
The income approach, also known as the discounted free cash flow method, is an important approach used to assess the economic value of a company. Using this method, we determine projections of future cash flows and adjustments to arrive at a market value for the company. The DCF method is similar to the earnings multiplier method. In the income approach, a company’s revenues, expenses, and tax liabilities are valued in terms of the number of economic benefits it can generate for the owner or investor.
- The market approach
The market approach is the most accurate method of understanding the intrinsic value of an entity. We analyze comparable brand information in the same industry, and transactions ideally in the same region from last year. Using this method, business consultants find differences in competitors’ pricing or profit margins and other indicators for the company under consideration. As a result, it is an extremely inaccurate way of assessing value, as markets sometimes undervalue companies. Moreover, it is difficult to assess the extent to which individual company-specific factors influence the majority of the market.
- The cost approach
The cost approach, also known as the asset-based approach, is determined by adding together the fair market value (FMV) of a company’s net assets. This method provides the actual value of the company’s assets and the owner’s right to liquidate or sell the assets. This approach is generally used when a large proportion of the assets have significant market value.
How do evaluation reports reduce risk areas?
Valuation reports contain comprehensive information and an assessment of the company’s main prospects. These reports accurately communicate the company’s current position and value in the domestic and international markets. Valuation reports are useful for investors, financial institutions, banks, and other entities that hold shares in a company. These valuations provide reliable and statistical information that enables better decisions to be taken. In addition, valuation reports reveal many areas of risk and review the various financial dimensions of a company.
It is not a bad idea to use a third-party professional chartered accountant when preparing company valuation reports. Our team of business consultants offers financial and accounting services in Dubai, Sharjah, Abu Dhabi, Ajman and throughout the UAE.
BestaxCA: Business Valuation Advisory Services
Bestax chartered accountants in Dubai help individuals, businesses and investors determine the net worth of their company. Some of the valuation services we offer include.
- Apply modern business valuation methods or techniques
- Comply with the latest regulatory guidelines
- Provide transaction and investment opinions
- Prepare robust valuation reports
- Asset and business loan management
- Litigation support
- Identify and address potential risks
Business advisory services in Dubai
BestaxCA is a group of well-qualified business consultants and chartered accountants in Dubai. Our firm has been serving local and international businesses for more than a decade. We have tailor-made solutions and methods to value your business and shares. The valuation method is tailored depending on your requirements. We accurately and precisely perform an internal valuation of your company for investors and fund managers.
Call us today to find out more about our professional valuation services in the UAE!
Call: +971 56 7981808