July 9, 2023

Value is subjective!

A glass of water is worth more to someone who has been walking around in the desert for 3 days than to someone sitting on a terrace at the Groenplaats.

Be aware of the difference between value and price. Determining the value of a company is not an exact science but a subjective estimate of the price. The price is the final amount someone pays for the shares.

Gather all the information!

To make an accurate valuation, you need detailed financial information, such as financial statements, income statements, balance sheets and cash flow statements. Make sure the information is reliable and up-to-date. Pull on your accountant's ears!

Visualise the opportunities and risks!

Analyse growth prospects and risks: Assessing the company's growth prospects is essential in determining value.

Review historical growth, market trends, competitive position and other factors that may affect future growth. Also be aware of the risks facing the company, such as regulatory risks, economic risks and operational risks.

‍Shoemaker, stick to your last!

Now that you are already somewhat prepared, it is time to seek professional advice: Valuing a company can be a complex process and it can be valuable to consult a professional valuation expert.

They have the expertise and experience to guide you through the valuation process and can help you get an accurate valuation.Is this free? Probably not but an external insight can help you in the price negotiation process. Think of it as an investment!

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