Business evaluation

The evaluation of a commercial enterprise is the process of determining the total value of the business, which depends on the value of tangible and intangible assets and liabilities, the efficiency of the processes, the presence of competitive advantages, the value of human resources and many other indicators.

The application of such appraisals covers a wide range of needs such as determining the market price, financial reporting, determining the selling price, ownership of partners, etc.

The instrument for evaluation may vary depending on the development of the company and the business area.

General approaches to business evaluation

The process includes a review of financial statements, analysis of cash flow models and comparison with competitors in the field. In-depth studies are conducted on the situation – legal, financial, economic, market presence, analysis of the area in which the business operates, technical, technological, etc., and reporting the sources of the used information. Various legal restrictions or advantages related to the normal functioning of the site/asset are also established.

Objectives and process in valuing a commercial enterprise

1. Determining the value of units or shares

The valuation of units and shares is performed on the basis of quantitative techniques and their value will vary depending on market supply and demand. Their price in publicly traded companies can be easily verified. Establishing the real price in the case of non-public companies is a challenge that Amrita’s certified consultants can help you with.

2. Determining the value of assets

Asset valuation is one of the most important things that every company needs to do. It involves the process of determining the value of a particular property, including stocks, bonds, buildings, machinery or land, which usually takes place when a company or asset needs to be sold, insured or taken over by another management. Assets can be categorized into tangible and intangible.

Tangible assets: are in physical form and are purchased to produce products or goods for the organization or to provide the services it offers. Tangible assets can be categorized as: fixed assets (land, buildings, machinery and equipment, vehicles, etc.) or as current assets (inventories, goods, receivables, cash).
Intangible assets: do not have a physical form, but still provide future benefits for the company. These may include patents, logos, franchises, utility designs and trademarks. Valuations can be made on either an asset or a liability, such as obligations or bonds issued by a company.

Valuations can be made on either an asset or a liability, such as obligations or bonds issued by a company.митирани от компания.

3. Determining the value of the business:

Business valuation is a general process of determining the economic value of an entire business or department of a company. It can be used to determine the fair value of a business or enterprise for a variety of reasons, including sales value, establishing ownership of a partner, taxation, and even in case of divorce. When needed, business owners often turn to professional business appraisers to get an objective assessment of the value of their business.

Necessary documents for business evaluation:

Short description of the company – when it was established, activity, human resource, etc.
Inventory book
Deeds of ownership and sketches of real estate (if any)
Financial statements for the previous three years and the last reporting period
Contracts, licenses
Main customers, competitors and suppliers
Detailed reference concerning the liabilities and receivables of the company by items

Deadlines for business evaluation

The deadlines for preparing evaluations are between 5 and 10 working days, depending on the complexity and purpose of the evaluation.
For more information and questions call our phones 0700 20 035, +359 (2) 865 09 09 or contact us at office@amrita.bg.