Analysis and development of an SME (small and medium business)
We now estimate the value of the business on the basis of certain valuation methods. The results are then analyzed to provide a range of values as a basis for negotiation. Application of methods based on financial figures Proforma: Attached is a detailed calculation of each method. Below, for each of them, we will give a brief theoretical explanation followed by the result.
Adjusted net asset value:
It is the only asset-based approach to be presented. It values the company from its assets. The value obtained amounts to 872 937 on the basis of a tax of 34%. Updating the average gross cash flow:
First approach to performance is based on a simple discounted cash flow, it proposes to enhance it based on the sum of discounted future cash flows. We chose the hypothetical interest rate of 3%, a risk premium of 7% and a discount period equal to 7 years. The result of this method is shown in the table below.
4 years 3 years 2 years 2009.
We develop below the great masses of Shopelec. For more information, please find enclosed the balance sheet and complete results in the following report.
There are very few fixed assets in society and the importance of capital structure can easily finance the operating cycle. It is noteworthy that in recent years, the company Shopelecet Elecinstal society have never had to rely on loans or overdrafts to fund their operating cycle due to the importance of the irrespective treasuries. Remember, the assets consist primarily of Shopelec stock ( 70,000) and cash.
First, the analysis of society can put forward a sound financial structure. All elements such as the need for working capital, liquidity, solvency, the company is favorable to the smooth functioning of it. In addition, the situation of the income statement shows a turnover with a relatively stable view of positive developments in the coming years.
Then, the target market for companies is part of an area of the strongest in France. This is an important point for a future buyer. In addition, the business organization is effective and may have no problems adapting to a new direction. In addition, it makes more sense to sell all of the two companies to be considered a separate sale to two different buyers. Indeed, the two companies have significant cross-activities. This choice corresponds to the will of the transferor.
Finally, we have valued the E & S and we arrived at a price between 803,000 and 1,006,000 euros. These values are averages obtained using six different methods. These values should not be taken as such; they offer a basis for discussion prior to any negotiation. Dans valuation is based on the consolidated financial statements "Proforma" we did not consider value for significant synergies between the two companies. This allows us to consider that the enterprise value should be closer to the upper than lower. Valentin method confirms this position by submitting a value of between 870,000 and 1,310,000 euros and 1,090,000euros for optimal use.
Tags: Financial structure, balance sheet, working capital, liquidity, solvency