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Understanding the enterprise, as property, does not coincide with the notion of «business». Business - an enterprise in action, and its value exceeds the value of the property complex of the value of the so-called intangible assets, inseparable from the human potential of the company (experience of the labor collective, established connections and relationships with customers, communication with public authorities and other unrecorded assets). It is the presence of intangible assets can be attributed to market the attractiveness of some firms with negative equity. What will be the object of evaluation in case of need to assess the business, because business is not subject to civil rights?
Business Valuation (determination of business value) of existing companies is somewhat different from the evaluation of enterprises as property complex. This difference is due to the fact that business - the concept is broader than the property complex. Company as a property complex includes all types of property for its activities: land, buildings, machinery and equipment, raw materials and products, intangible assets, property obligations. Market valuation of the property complex of the enterprise (business valuation) means the determination of monetary value of tangible assets of the business as a commodity, that is, their usefulness to a potential buyer and the costs required to obtain this utility.
So, you should:
- Buy or sell a business in the most favorable conditions for YOU;
- Having a clear idea of the value of their assets as well as contractors, reliable information about potential payback of the enterprise, the amount of annual profits, the future development of the market for goods and services;
- Take the best, economically sound management decisions to select the strategy of the transaction;
- Having a strong case for negotiating and defending their point of view in the process of the transaction;
- Reduce the level of financial risk in lending;
- Have reliable data on the real value of your business when making transactions (exclusion, inclusion in the statutory fund, the transfer of a pledge, lease, rental, Insurance, etc.);
- Have a competent, independent opinion on the business value, based on generally accepted in Ukraine and world practice approaches to evaluation;
- Determine the amount of damage as a result of your breach of property rights;
- Obtain documentary evidence (a report on the assessment of business), which will be valid in court and could be used in court proceeding.
You are invited to an independent expert assessment of business (business valuation):
- private, collective, communal, state, etc.;
- company (closed, open joint stock companies, limited, additional, full responsibility, etc.);
- structural subdivisions of enterprises (workshops, production areas);
- associations of enterprises (associations, corporations, consortia);
- rural (farm) economy;
- Banks and other financial institutions (insurance companies, credit unions, institutes of joint investment);
- organization of market infrastructure (commodity exchanges, stock exchanges).
The dynamically developing market of buying and selling a business, and investment requires the timely receipt of full information about the object of sale at the stage of the decision to close the deal.
Assessment of business - the definition of business value as a property complex, able to make a profit for its owner. In conducting the evaluation examination determined the value of all assets of the company: real estate, machinery and equipment, inventories, investments, intangible assets. In addition, separately evaluated the effectiveness of the company, its past, present and future income prospects and the competitive environment in this market, and then compares the target firm with businesses-analogues. Based on such a comprehensive analysis determines the real business value, as property, capable of generating revenues.
The objectives of business valuation (the valuation of the business) may be:
- Improved business management;
- Justification of investment decisions;
- Development plan (business plan);
- The restructuring of the company (liquidation, merger, acquisition, allocation, etc.);
- Determination of current market value of the business in case of partial or complete a purchase or sale, with the output of one or more members of the societies, etc.;
- Determining the value of securities companies, shares, shares in its capital, in cases of various types of operations with them;
- Determination of credit companies and the monetary value of the collateral for loans;
- Determining the market value of property in the insurance operations;
- Taxation of enterprises (in determining the tax base should be an objective assessment of the enterprise);
- Revaluation of assets of an enterprise for accounting purposes;
- Revisions to the authorized capital of the property contributions of the founders;
- Redemption of shares from shareholders;
- Appeal against court decision on confiscation of property;
- Determination of the rent upon delivery business in the lease;
- Issues of securities.
The list of documents and information needed to assess the valuation of the business (the definition of business value):
- Copies of constituent documents (Charter, Foundation Agreement, Certificate of registration).
- Copies of prospectuses, reports on the results of issue of securities (for joint stock companies).
- The activities and organizational structure of the company.
- Copies of leases on real property (if any).
- These financial statements for the last 3-5 years (or perhaps a number of previous periods);
- balance sheet;
- profit and loss account;
- Last audit report (if conducted an audit);
- Statement of fixed assets;
- Inventories of property;
- Information on all assets (real estate, stocks, shares of the society, promissory notes, intangibles, etc.);
- Explanation payable;
- Explanation receivables: the timing of education, by type of receivables and the proportion of bad debt;
- Information on the availability of subsidiaries, holding companies (if any), financial records on them;
- Corporate development plan for the next 3-5 years with an indication of the proposed gross receipts for goods / services, the necessary investment, costs, net profit - for years.
- This list is a preliminary document and may be shortened or extended after detailed examination of the appraiser with the task of examination.
Cost of services for business valuation (the valuation of business) shall be specified in each case and depends on the following factors:
- type and composition of the object of evaluation;
- complete and accurate information available to customers need information about the object of evaluation;
- timing of the order.
RENTA GROUP company evaluate the business on the basis of Certificate of State Property Fund of Ukraine. Experts of our company have many years practical experience business valuation.
Evaluation business is carried out in accordance with procedures as determined by the current legislation of Ukraine, based contract with the customer. The results of the work is made appraisal report of the business, having full legal force to the participants in the transaction and the users of the report.
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