Valuing Privately Owned Companies: Valuation Techniques - Technical Note
Subject
Economics, Economics, Marketing
Authors / Editors
Mullins J; Johnson R M; Pesenti S
Biographies
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
