One of the most developed countries UAE is now been a hub of
multi cultured ventures. There is a vast development in the field of
entrepreneurship which led to an increase in the new organization map into the
land of UAE. The tradition occupation of the gold and petroleum has also been
growing in the recent years which made a tremendous drift of people from other
ventures to move into the country of UAE. Business Valuation is the term that
is herd more often in the developing organization. The business valuation
process is more prominent for the organization that believes in kicking a robust
performance.
What is Business
Valuation?
Business Valuation is the process by which a company
involves in the stage of exercising its historical records and statement to use
them for the future ventures and plans. Valuation of Business is embedded with the
detailed analytics of the historic statement and precise estimation of the
previous activities by the organization. This also involves the details of the
impact on the earning potentiality of the business and the extent of the
resources.
Techniques to
evaluate the Business
Various valuation techniques are used for the process of
evaluating a company’s business depending upon the application of the approach
for a particular business. Key approaches to evaluate the business valuation
could be listed as:
·
Net Asset Value
·
Market Based Valuation
·
Future Earning and its Net present value
Focusing on the objective of valuation of a business as a
concern, the general approach of “Future Earning and its Net present value” is
applied considering the earnings as the key point. The common techniques used
in future earnings and net present value are:
·
Capitalization of maintainable earnings
·
Discounted cash flow (DCF)
The DCF method is common method in valuing the business for
various reasons and these can be listed as:
1.
New alliances with investors
2.
Short history of operations
3.
Potential growth of the organization
With a healthy growth in the retail and global market around
UAE there is a higher chance to occupy the trend of business with the usage of
these Business Valuation Techniques.
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