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Valuing Privately Owned Companies: Valuation Techniques - Technical Note

Subject

Economics, Economics, Marketing

Authors / Editors

Mullins J;Johnson R M;Pesenti S

Biographies

John Mullins

Publication Year

2021

Abstract

It is commonly said that the valuation of companies is more of an art than a science. The essence of this statement is that arriving at a valuation is a matter of judgment, balancing the consideration of various factors, rather than the mechanical application of a mathematical formula. This is especially true when trying to value an unquoted (privately-owned) company. However, this does not mean that valuation is a purely subjective exercise, where different figures arrived at by different routes may be regarded as equally valid. From the valuer’s perspective, some approaches may clearly be a better guide to value than others in specific situations. The skill of valuation lies in assessing the relative appropriateness of differing valuation benchmarks to a particular situation.

Topic List

Entrepreneurship

Industry

Finance

LBS Case Number

TCN-21-002

Location

United Kingdom

Publication Notes

https://publishing.london.edu/cases/valuing-privately-owned-companies-valuation-techniques-technical-note/

Available on ECCH

No


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