www.ni-con.de/en/auditing/company-valuations/index.php

How to get in touch

NICKEL

Certified accountant

Tax advisor

 

NICON GmbH

Accountancy firm

 

Alfredstraße 163

45131 Essen

Tel.: +49 201 437 09 60
Fax: +49 201 421 234
Mail: info@ni-con.de

Company-valuations

A company valuation is always necessary as a basis on which to determine pricing when companies are to be sold, bought, merged or floated on the stock exchange. Company valuations are a traditional area of work for accountants. Our firm is also specialised in this demanding field of business consultancy. We value companies in accordance with the recognised standard of the Institute of German Certified Public Accountants (IDW Standard S1) or according to valuation methods which are customary in the specific sectors of industry concerned.

Income value appraisal method in accordance with IDW Standard S1

According to the income value appraisal or discounted cash flow method, the value of a company is determined as the capital value of future income cash flows. To this end, future income must be forecast on the basis of detailed corporate planning and discounted to the present at an interest rate corresponding to the rate of return required by lenders. The interest rate to be applied comprises a risk-free base interest rate (e.g. rate of interest on a federal government bond) plus an allowance for the general market risk and the company-specific risk (so-called beta factor).

Sector-specific valuation methods

Modified valuation methods exist for some sectors of industry. We are familiar with these and apply them accordingly. One such example is the method employed by the German medical council to value medical practices. There are also special methods for valuing law firms.

In practice, companies are also commonly valued by means of the simple multiples method. This involves multiplying a sustained EBIT figure (earnings before interest and taxes) by a standard factor (multiple) for the sector of industry concerned.

Interested? We look forward to hearing from you.

 

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NICKEL | Wirtschaftsprüfer, Steuerberater l Alfredstraße 163 l 45131 Essen

NICON GmbH | Wirtschaftsprüfungsgesellschaft l Alfredstraße 163 l 45131 Essen