Income Approach VS Market Approach – How to Strike the Balance while Going for Business Valuation?

Income Approach VS Market Approach – How to Strike the Balance while Going for Business Valuation?

March 26, 2019 Admin 5
business valuationmarket valueinvestment valueSWOT analysisresurgent india

Business valuation is basically the process by which one can determine the economic value of any business entity. It is often used for determining the fair value of any business for a number of reasons, like the sale value of a business entity, the establishing partner ownership of an organization and even the divorce proceedings etc. The number of clients demanding for business valuation of other businesses from a pragmatic lens view has increased. At least, the client data sheet of Resurgent India testifies this fact. Gone are the days when business fraternity was moving ahead with intuitions and recovery guarantees associated with the new business proposals. After the arrival of the big data facilities, the standards of business valuation have gone very high.

Income Approach VS Market Approach – How to Strike the Balance while Going for Business Valuation?

Fair Market Value VS Investment Value – Which Approach Is Right?

Individuals going for a business valuation often find themselves on crossroads during the process because they confuse between the fair market value and the investment value of a business. Let’s consider the case of Ola Cabs, and many more start-up businesses, when they started their journey. At that point in time, there were to methods to go for a business valuation of their proposals. The fair market value of enterprise was very low at that point in time, because they were not having enough tangible resources. For instance, Ola was not having an impressive fleet of the cabs, and they were entering as an organized cab service provider in the market. From the conventional models of an investment model, it was unwise to invest in Ola at that point of time if we go by the conventional parameters of business valuation.

 

The Thin Line between Intuition and Calculation while Going for Investment Value

Places like Resurgent India never claim that they know the magical thin line where intuition and calculation finds a divide during the process of business valuation. However, our experts are well versed in the art of presenting the cases and studies related to your business in a fashion where merchant banks and other institutional investors can have a look at them and understand your worth in an easy way. While going for the exercise of the business valuation, seasoned investors want to study data in a certain sequence. It is a kind of algorithm for them to put your case study on the merit of a SWOT analysis. Most of the new business entrepreneurs fail in understanding this need of the investors, and some of the best proposals find a way in the dustbins or the recycle bins of the investors. Experts working in Resurgent India can put down a method in your business proposal, and make it more business valuation friendly.

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