When one big high street chain looks to buy another, negotiations can be difficult. This is largely because the process of valuing a business becomes so complicated.
Business valuations – determining the worth of a company – is rarely an easy task, which is why forensic accounting services can prove so valuable in this area. To calculate the value of a company, a wide range of factors must be taken into consideration, including stock, properties, contracts, order book, multiple revenue streams, intellectual property and more.
BT agreeing to buy EE was one high profile business sale in recent weeks, with the deal reportedly worth £12.5 billion. A huge sum of money, but no doubt one that was carefully arrived at through the work of expert business valuers.
Another merger and acquisition that made the news of late was Poundland agreeing to buy rival 99p Stores for £55 million. Now, as far as buying a retail business is concerned, one might think that buying a shop where every item was worth a pound would make matters easier, but of course this is not the case. Again a thorough examination of all 99p Stores’ different branches, assets, stock and takings would need to have been conducted so Poundland could assess how much it should pay for its competitor.
Of course there are more reasons for a business valuation to be carried out than one firm wishing to acquire another; divorces or stakeholders parting ways also requires a price tag to be put on the business so each side can get the full worth of their share of the company. The forensic accounting experts at Frenkels are experienced in seeing the full picture and calculating the value of a business to help with a range of different proceedings.
For expert help with a business valuation contact Frenkels Forensics for an independent appraisal.
By Vitek Frenkel – find me via Google+.