Understanding value creation
Valuation requires a solid understanding of both how value has been generated in the past and how it will continue to be created in the future.
The ability to understand the company's vision and key performance indicators and how it deploys its invested capital to produce a return on capital that exceeds its cost is the basis for valuation. The valuation process does not follow a fixed path; rather, it follows several different paths that change by industry and life cycle stage. Understanding this process is at the heart of our valuation expertise, whether it is value analysis for financial reporting, M&A transactions, legal, accounting or recapitalization issues
Measuring the value
Valuation involves both science and the judgment of the independent expert. The scientific and analytical component involves a range of approaches or methodologies that are used both for the purpose of the valuation itself and for the creation of specific metrics (e.g., cost of capital, discounts and premiums). Net asset, market or intrinsic (DCF) methodologies are the most commonly used valuation techniques. The intrinsic and market approaches are by far the most commonly used in business valuation, but the net asset approach may be used on occasion. The market approach uses the application of market multiples of comparable companies or transactions, while the intrinsic approach bases the measure of value on the present value of the company's future cash flows.
The skill of a valuation lies in the skillful application of these techniques while using expert judgment. This type of analysis requires a thorough understanding of the needs and expectations of regulators and other stakeholders, which can only be achieved through years of expertise in a variety of business life cycles, sectors, countries, and valuation grounds.
How can we help you?
We tailor the scope of our assessments to meet the individual requirements of our clients and the objectives of the assignment. When necessary, our valuation report provides an overview of the company, its industry and the general state of the economy. It also discusses the value drivers, describes the analysis performed and the data and assumptions used, and includes detailed supporting documentation to substantiate our conclusions. In the event of a dispute, we provide our clients with additional support, including acting as an expert witness at trial.
Why Olifin?
Olifin assists its many clients in the valuation of businesses and equity investments, as well as tangible and intangible assets and complex and difficult-to-value securities. There is no complex valuation issue that we have not faced. Our professionals are very involved in the valuation industry's efforts to develop best practices. Our professionals have the expertise and experience to meet any business or asset valuation need.
