Which valuation methods to use to value a company?

For each company, a different valuation method!

What is the right valuation method to value a company company? First of all, there is no universal valuation method that could be adapted to the valuation of all companies. It is necessary to determine the 2 or 3 best valuation methods according to the following criteria the following criteria concerning the company to be valued:

  • Is the company to be valued listed on a financial financial market?
  • What is the business sector of the company to value ?
  • What is the size of the company (turnover, number of employees, etc)?
  • What types of assets does the company to be valued have? (intangible, tangible or financial)
  • What is the level of profitability or operating margin of the company to be evaluated?
  • What is the growth rate of the company's turnover?
  • What capital intensity?
  • What dividend policy?

Use 2 or 3 valuation methods for each company to be valued

Then it is necessary to cross these various parameters to determine the most appropriate valuation methods for each company: net asset company: Net asset value, goodwill method, multiples method, discounted method, discounted dividends method, DCF method, real options methods, etc. option methods, etc.

For example, if we cross-reference the capital intensity (low in this example) and the growth rate of the growth rate of the activity, the method of comparables will be used in a privileged way comparables for real estate management or insurance brokerage (low growth) and the DCF method method for digital start-ups (strong growth)

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