The value of your company depends on various factors, including the current state of the global economy and balance of your business. Assessment of needs to an expert, but is not made by the owner. Several evaluation methods are used to determine an actual price for your business.
Evaluation methods based on assets by subtracting the value of assets and liabilities of enterprises, or determine the amount has been given only if all assets were sold.
Income amounts to determine the costs of a company that other assessment methods to the idea that real value added in production because of its ability to flourish in the future. This approach determines an expected level of cash flow and an evaluator uses a tape of the previous earnings of the company, and scaled for unusual expenses or income and multiplies the expected cash flows at a rate of capitalization. What is a capitalization factor? It shows the rate of return and a measure of risk that the buyer can reasonably expect investment in the company.
Other income value approach – Discounted future performance – takes an average of projected future earnings and dividing by the conversion factor. Established companies showing an interest rate of 12-20%, the activity has not proven superior capitalization rates.
Value method to assess the market value determined by comparing your company as well which was recently sold. But this annual assessment work properly if it is a sufficient quantity of similar companies to compare quality.
Determine the best way to a selling price for most companies a combination of assessment will be undertaken, but not one of them, even if the profitability of the value approach is the most common method Assessment of companies.