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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