Company valuation in practice: factors influencing value
Company valuation in practice: factors influencing value
In the context of a company valuation, there are a number of factors that can have a significant influence on the valuation of a company. Both intrinsic and extrinsic factors play a decisive role, which in turn depend on the respective position and intention of the valuer. The “true” value or market value of a company only emerges at the end of a negotiation process, when the parties have agreed on a price. The theoretically calculated company value can therefore be a guideline for price negotiations, but does not usually correspond to the purchase price for the company. The following are examples of some of the key factors.
Intrinsic factors
Extrinsic factors
Company valuation in practice – Our conclusion
A company valuation is influenced by a variety of factors, meaning that the “true” or market value of a company is usually only determined at the end of a negotiation process once the parties have agreed on a price. The theoretically calculated company value only serves as a guideline for price negotiations and does not usually correspond to the final purchase price. Overall, practice shows that a comprehensive and balanced consideration of intrinsic and extrinsic factors is necessary in order to achieve a realistic company valuation. The success of a company and its attractiveness for potential investors therefore depend on a careful evaluation and consideration of these elements.
We are happy to advise you
Marcel Brix
Managing Director | BLOK Management GmbH
Oliver Kolb
Managing Director | BLOK Management GmbH
Further insights
Category: Deals
Published on 6. November 2024