When should we carry out a company valuation? What is the best time of year?

Quando devemos realizar a avaliação de uma empresa (1)
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When should we carry out a company valuation? What is the best time of year?

There are several scenarios in which it is necessary to carry out an assessment of your company:

Before buying or selling a business: If you are looking to sell your business or acquire a new one, it is crucial to know the true value of the business to ensure you are taking the best possible decision.

During succession planning: Valuation can be used to help determine the fair value of the business for estate planning purposes or to ensure a smooth transition of ownership between members of the family.

For financing purposes: A valuation can help determine the amount of equity in the company and provide a basis for negotiations with investors or creditors.

Legal disputes: In the event of legal disputes, such as divorce, disputes between partners or shareholders, a business valuation can help determine a fair value of the company for settlements.

Annual review: Some companies conduct regular business reviews to track changes in the company’s value over time and make informed strategic decisions.

There is no best time of year to evaluate a company, as the timing may depend on the specific needs and circumstances of the business. However, some factors must be considered when deciding to invest in an evaluation:

Fiscal Year End: A company’s financial statements are generally prepared annually, and performing a review after the fiscal year end can ensure that the most recent financial data is used in the evaluation.

Timing of Significant Events: If the company is anticipating a significant event, such as a merger or acquisition, it may be beneficial to conduct a pre-event valuation to determine the company’s value beforehand. any changes to occur.

Availability of financial data: The valuation process requires access to financial data and other relevant information, therefore it may be best to undertake the valuation when all necessary data is available and up to date .

Market Conditions: A company’s value can be affected by market conditions, so it may be beneficial to perform the valuation during a period when market conditions are stable and consistent.

In summary, the best time to conduct an assessment depends on the purpose of the assessment. It is usually done when you need to know the value of the company for a specific reason, such as selling, purchasing, financing or planning.

At Valuing Tools we help you understand the best time for an evaluation of your company, which should be based on the needs and objectives of your business, as well as any external factors that may affect the value of your company, with the greatest rigor and professionalism.

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