75-78, Level 4, A-Wing, KK Market, Dhankawadi, Pune-411043.
Business Valuation for all Types of Businesses:
Business Valuation is a process of determining the economic value of a business or company is known as business valuation or company valuation. It can be used to determine the fair value of a business. It is an approach where the worth of the business and its assets are determined for various reasons such as
When they are opting to sell their enterprise.
Revenues are an important determinant but they are not the only consideration in the valuation process. Other factors being weighed are the business type, its history, financial status, stock value, intangible value, competition, and the general economic outlook.
FOREX Transactions & Overseas Transactions:
FOREX is nothing but the foreign exchange. It is a system for dealing in the currencies with other countries. Foreign exchange market is over the counter market in which foreign currencies of the world are traded. It is considered the largest and most liquid market in the world. Trading in the FOREX is not done at one central location but is conducted between participants through electronic communication networks (ECNs) and phone networks in various markets around the world.
Fair market valuation of a Property:
Fair Market Value is an evaluation of the market value of a property a buyer would be willing to pay a seller in the market. Fair market value is the price that property would sell for on the open market. It is the price that would be agreed on between the two parties, with neither being required to act, both having the reasonable knowledge of the relevant facts.
Fair Market Valuation of Common Stock:
Fair market value is the amount of a stock is worth on the open market. Fair market value generally incorporates the following assumptions:
Buyers and sellers are knowledgeable about the asset in question.
Buyers and sellers are seeking to further their respective financial interests and are not under pressure to act.
Buyers and sellers can execute their transaction in reasonable time frame.
Fair market valuation of Options:
Let us first understand what options are. Options are a type of derivative security. They are a contract that allows the owner or holder of the Option the right but not the obligation to buy or sell an underlying asset at a particular price within a particular period of time. Options are just like any other investment. They are of two types.
Call Option – The right to buy is called Call Option.
Pull Option – The right to sell is called Pull option
Fair market valuation of Preferred stock:
The preferred stock comprises of preference shares. They are different than ordinary/common shares. Preference shares have a fixed dividend and preference share holders are paid before common shareholders and they do not have voting rights. Holders of preferred shares have the prior claim on a company's assets if it is liquidated. With the help of the Preference shares an investor gets right to own a stake in the company with one condition that whenever the company decides to pay dividends, the holders of the preference shares will be paid first.
Fair market valuation of Debt securities:
A debt security interests paying bonds, money market instrument, notes and bills etc that are issued by government or corporations. A debt security is a financial instrument. It is issued by the company and then sold to an investor. The debt security represents a promise to pay back the face amount and interest until the instrument matures. It has following advantages.
Advantages of Debt securities:
They are considered risk free inside the country. Even the bond issued by the foreign government is considered risk free.
Since they are less risky they are very safe to invest
It does not require too many formalities to be issued
Private companies can raise money very easily through this
Raising money through this is very cheap compared to other sources
Fair market valuation of Warrants:
In simple terms, a warrant is just like an option issued by a company that gives the holder the right to buy stock from the company at a specified price within a certain period of time. Just like Option, it does not represent ownership of the stock of the company but only the right to buy (not the obligation) within specified period of time. Warrants also have the longer life than Options.
Factors influencing warrant pricing are:
Underlying Security Price
The price of underlying security affects the price of the warrant. This means that if the price is high, its value will be too.
Days to Maturity
Options and warrants are worth less as time goes on and expiration approaches. This is also called time decay, and it will accelerate as expiration approaches
Interest rate/risk-free rate
Just like options; higher interest rates increase the value of warrants.
Fair market valuation of projected streams of cash flow:
Cash flow is the amount of cash the company gives or receives in the form of payments. It can be positive or negative. Cash flow is positive when the company receives cash; it is negative when the company has to pay cash. Cash flow statements are prepared to know where the cash is coming in and going out.
ESOP Valuation ( employee stock ownership plan ):
ESOP means employee stock ownership plan. It is a plan through which a company awards Stock Options to the employees based on their performance. The fair value of an ESOP is estimated using an option-pricing model. The value of ESOP ( employee stock ownership plan ) is determined by the financial condition and performance of the company. ESOP is like an additional capital for the firm.