There is no single formula for valuing a company. While requiring a rigorous background in financial theory and mathematics, a good valuation also requires seasoned judgment and decades of practical experience.
We typically use a combination of valuation methods, including Discounted Cash Flow (DCF), as well as multiples of Revenues, EBITDA, and EBIT for comparable publicly listed companies and for comparable companies that were recently sold.
In our valuations we routinely seek to arrive at a definition of fair market value based on the definition of the American Society of Appraisers: “the amount at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell, each being aware of the relevant facts.”
At Euro-Phoenix, we have performed numerous valuations, and pride ourselves that where we performed valuations, followed within a short period by transactions, our track record of valuation proved remarkably accurate.