BUSINESS VALUATION
It is essential to define the exact purpose of the valuation.
BUSINESS VALUATION ESTIMATE
This means that we do not conduct a comprehensive examination; we only provide a valuation based on the limited data available. In most cases, the assessment is based on the financial statements, using the most common method: an EBITDA-multiple estimate.
SUMMARY
Accuracy: indicative
Usefulness: none — for informational purposes only; must not be used for decision-making.
ACCURATE BUSINESS VALUATION
The company’s value is determined with high precision using at least three valuation methods, resulting in a final, well-reasoned conclusion. This type of valuation is typically used by buyers during acquisitions before submitting non-binding offers, helping them understand the real value of the company. At this stage, they generally accept the information provided by the seller as accurate.
It is also highly useful for business owners or executives who want to know the true value of their own company.
SUMMARY
Accuracy: over 95%
Usefulness: provides a highly accurate understanding of the company’s value and the reasons behind that value.
COMPREHENSIVE BUSINESS VALUATION
When is it needed:
During company acquisitions to prepare the final binding offer, for balance sheet revaluations, or in legal disputes such as asset division in divorce proceedings. In these cases, the valuation is carried out with the involvement of attorneys, accounting professionals, and experts relevant to the company’s specific industry.
The purpose of this valuation is to substantiate the result of the Accurate Business Valuation by eliminating hidden risks. The outcome must be consistent with that of the Accurate Business Valuation. Essentially, every statement and fact related to the company is verified by specialists during the due diligence process.
SUMMARY
Accuracy: over 95%
Usefulness: a company valuation based on verified facts
BUSINESS VALUATION
FOR THOSE WHO NEED PRECISE DATA
THE DETERMINATION OF TRUE COMPANY VALUE REQUIRES COMPLETE AND COMPREHENSIVE DATA
The foundation of an accurate, real-world valuation is a thorough and all-encompassing analysis. A company value calculated solely from ledger figures can differ from the true value by as much as 80%.
A 10% HIGHER COMPANY VALUE AT A 0.01% COST IS AN EXCELLENT INVESTMENT FOR EVERYONE
In a company sale, the cost of calculating the true company value is only a fraction (0.01%) of what one could lose by relying on a free online calculator. The seller receives the real value, and the buyer gains a clear understanding of how that value is created.
THE HIDDEN TRAP IN BUSINESS VALUATION
CALCULATOR OR PROFESSIONAL BUSINESS VALUATION
THE RESULT OF COMPANY VALUE CALCULATORS
A calculator relies solely on ledger data to determine company value — which is why this approach is considered only an estimate.
THE RESULT OF A TRUE COMPANY VALUATION
A true company valuation accounts for every relevant factor, making the result accurate and reliable.
FREQUENTLY ASKED QUESTIONS IN BUSINESS VALUATION
QUICK ANSWERS FROM OUR EXPERT
When is it important to calculate a company’s value?
When selling or buying a company, it is essential — even a small deviation from the true value can result in significant losses.
Conducting a valuation once a year is also important, as the change in company value is one of the most accurate indicators of business performance and growth.
És nem csak az érték változását kapjuk meg egy cégértékelésből, hanem annak az okát is.
What data does the valuer use during the company valuation process?
Every piece of information related to the business influences its value. If anything is omitted, the final result can be significantly distorted.
This means the valuer carries substantial responsibility and must have extensive practical experience to properly assess and interpret all relevant data.
Financial performance is important — but employee expertise and motivation, customer strength, supplier quality, and many other factors also play a critical role in determining a company’s true value.
Which valuation method do we use?
Valuation can be performed in several ways. The appropriate method always depends on the company’s specific situation and type.
It is the valuer’s responsibility to determine which approach is suitable.
In most cases, two different methods are applied, and the final company value is derived from the combined results.
What does the valuation report include?
The result of the valuation is a 10–20 page report that includes the company’s value in the requested currency, along with a precise and detailed explanation of how the result was determined.
It also contains the valuer’s professional opinion and, if requested by the client, several recommendations on how the company’s value can be increased.
What is the process of a business valuation?
The valuation process begins with a personal consultation, during which the valuer gains an understanding of the company and identifies the factors influencing its value, along with their associated risks.
Next, the company’s financial statements are requested, after which the valuation and the preparation of the report are carried out.
The valuation is delivered in person, accompanied by clear explanations. The valuer always justifies their conclusions and answers any questions.
Once the client accepts the report, the invoice is issued for the previously agreed amount.
PAPP & SON CONSULTING PROFESSIONAL SOLUTIONS FOR COMPANIES AND EXECUTIVES
For more than 20 years, we have been working in business development—today a fully measurable and structured process. Our partners are companies that aim to grow on a solid foundation, with a stable background and continuous control. Within the Papp & Son Consulting framework, the entire value-growth process becomes transparent: clients can track progress, results, and direction at any moment.
The foundation and primary goal of business development is increasing company value. This is because company value is the only metric that provides a complete and accurate picture of a business’s development.
If a company’s value increases, it is moving in the right direction.
If it stagnates or decreases, intervention is required.
A valuable company generates profit steadily, operates with lower risk, and develops continuously.
Contact
Tel: 06-30-641-6053
E-mail: office@pappandson.com
www.pappandson.com