December 22, 2016 IBOMLLC Team

Business Valuation process is an Art not a Science | Complex Africa Business Exit Forum

Innov8tiv
Innov8tiv – Blacks In Technology in USA, UK, Caribbean Islands & Africa

While addressing the attendants to the Complex Africa Business Exit Forum, Damilola Aloba, the Associate Director, Transaction Advisory Services at Ernst & Young spoke on ‘Preparing your Business for Sale’. He had the following to share:

A business valuation largely depends on the aims and objectives of either the buyer or seller at the specific given time. Aloba states that the three fundamental approaches to valuing a business are:

*Asset-approach

*Market-approach

*Income-approach

Aloba went further to demonstrate how a business worth can be arrived at from an intrinsic and relative valuation methods. Stating that:

A business Intrinsic Value: This is a business’s asset worth that is estimated basing on its cash flow, its inherent risks, and its potential for growth.

A business Relative Value: This is the value of the business based on comparison with market prices of similar businesses in the industry. By comparing a business’s asset prices to that of comparable businesses’ assets worth using a standardized price.

As for the legality aspects of a business valuation and the valuation of intangible assets, one Ikechukwu Ubahakwa a Partner, Astute & Young, told the attendees to follow due diligence and sort …read more

Read more here:: Business Valuation process is an Art not a Science | Complex Africa Business Exit Forum

      

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