Business Valuation – What are the Most Important Documents?

Company valuation is a process that aims to determine the market value of an entity with commercial activity, considering its financial, operational, strategic aspects and the industry in which it operates. The evaluation of companies can have different objectives, such as mergers and acquisitions (M&A), attracting investments, succession planning, corporate restructuring, among others.

To carry out a company valuation, it is necessary to have access to a series of documents that prove the company’s economic, patrimonial and accounting situation. These documents are essential so that the consultant can apply the appropriate methods and techniques to estimate the company’s market value.

Among the most important documents for evaluating companies, we can highlight:

– Income statements for the last four to five years;

– Balance sheets from the last four to five years;

– Reports and accounts and management reports from the last four to five years;

– Amortization map of the last four to five years;

– Map of sales and monthly operating costs for the last three years;

– Products and services offered;

– Strategic and business plan.

These documents allow the analyst to have a broad and detailed view of the company, which allows them to analyze profitability metrics, liquidity, debt, cash conversion capacity, general industry framework, competitive advantages, risks and opportunities.

Based on this information, the appraiser can choose the most appropriate method to calculate the company’s market value, whether using discounted cash flow, multiples, net equity or another more appropriate method.

Business valuation is a complex process that requires technical knowledge and experience. Therefore, we recommend that you use a company specialized in company valuation such as ValuingTools, which will guide you and ensure all stages of the process. This way, it will be possible to make more assertive decisions and maximize business results.

Carry out a free simulation of your business now to find out how much your company is worth: