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:
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