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Valuation Consultation and Evaluation

CK Capital is prepared to provide objective conclusions on the relative fair market valuation of a business based on revenue, expenditure, and peer comparables approaches.

Revenue Approach

One of the most widespread methods of revenue approach is the DCF model, which comprises the following components:

The main advantage of the DCF method allows for consideration of a business’ future growth potential. Its main shortfall is related to the heavy dependence on a discount rate and the final valuation.

Expenditure Approach

Another widely used method of valuation is the Net Asset Value (NAV) method, which comprises the following steps:

The NAV method is a more exact means of valuation for companies that possess significant physical assets and are financially stable. If a company has entered bankruptcy, or if serious doubt exists as to whether a company can remain solvent, then a liquidation valuation is used. This is also calculated under the expenditure approach.

Peer Comparables Method

Another popular method of relative valuation is the analysis of peer companies and/or similar deals, which consists of the following components:

Valuation multiples can be interval (price/revenue or price/gross profit) or immediate (price/working capital + Intangible assets or price/NAV).

The peer comparables method is most trustworthy when one has access to reliable market information. Our consultants have access to Bloomberg terminals and other information services that guarantee an uninterrupted flow of the most trusted market information for assembling and calculating multiples analyses.

In the absence of peer companies to analyze, there are two other methods for valuation analysis that may be employed.