What is Business valuation
Research shows that only about 2% of business owners know the value of their business, this means when coming to buy, sell or transfer shares in the business it is very difficult to ascertain the right value. This is despite valuation companies in Dubai such as Ekuiplus offering a high standard of valuation services. Our team of business valuation consultants in Dubai can help companies and investors in the region to determine the enterprise value and support, and provide support through any associated transactions.
When it comes to establishing the true value of a business there are are multiple valuation techniques that valuation companies in Dubai use, and our experts at Ekuiplus tend to use one of the below, or a combination, based on the data available to us and the type of company we are dealing with. However we do believe that there are many other factors that must be looked at when dealing with valuation, such as the company’s unique selling points, their team and their business model. This is why we ensure that the below tools are used alongside a thorough analysis of the company, to ensure the valuation reached is a realistic and acceptable one.
Income Approach (Discounted Cash Flow Method)
The “DCF” method is considered the most rigorous when valuing a business. This technique sees Ekuiplus experts estimate future cash flows, the time frame for these, and then the projected free cash from operations are discounted at the weighted average cost of capital. The sum of such discounted free cash flows combined with other considerations like the perpetuity growth rate of the business and terminal capex, is what helps us to arrive at a fair business valuation.
Market Approach (Market comparable)
Using this approach, we compare data from other businesses, ideally within the same sector and region, to arrive at a valuation. This method is only effective on its own, if there’s enough comparable recent transactions and also if there is enough reliable and available data to perform a worthwhile analysis.
Asset Approach (Net Asset Value)
The Asset Approach involves the actual valuation of company assets. We tend to use this method when the realizable value of assets is particularly high.
Sectors we cover
As company valuation consultants we cover a wide range of sectors in the UAE, such as: