BUSINESS VALUATION FOR SHAREHOLDER DISPUTES

When it comes to solving shareholder and partnership disputes, business valuation is a vital tool to ensure everyone knows how much their investment is really worth. We can help.

How to Resolve Shareholder & Partnership Disputes with Business Valuation

Disputes between shareholders and partners over the true value of their company can arise for a number of reasons. Perhaps one wishes to exit the firm, or they believe their dividend amount is incorrect. Business valuation provides an unbiased and detailed examination of the company’s finances — so all parties have a clear picture of how their firm is performing.

Required Information for Business Valuation

While the finer details of each business valuation will vary greatly, it is important to collate key information across two core categories consistent across all valuations: commercial and financial information.

Commercial information refers to studying a company’s turnover (income, expansion plans, etc.). Whereas financial information pertains to financial statements, projections, budgets, and more.

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Business Valuation Guide

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Simple Business Valuation Methods

When undertaking a business valuation for shareholder disputes it is vital that, regardless of the size of the business or dispute, you are as honest and accurate as possible — nobody wants to be caught out making unfounded estimates in business. The most common methods of valuing businesses include assessments of a firm’s income, net asset valuations, or dividend yield.

Business valuation by way of income assessment entails determining the value of a company by correlating the income and profits it regularly brings in with its current value. This method theorises that any prospective buyer would be looking primarily at the profits it can extract from the business, meaning that this figure should be seen as the main indicator of value.

The net asset method of valuing your business requires you to take into account your current inventory of stock and net assets, and basing your share values on this figure. When using this method you must deduct your liabilities from your total assets.

Particularly useful if your shareholder dispute concerns a minority shareholder, the dividend received by the company refers to a minority shareholders’ return on investment. To calculate the dividend yield you must take the maintainable dividend and divide it by the required rate of return.

How We Resolve Shareholder & Partner Dispute Cases

With decades of experience in assisting companies with business valuation for shareholder disputes, Inquesta Forensic knows the valuation process from top to bottom — making us perfectly placed to assist you.

We offer a bespoke, holistic service for all of our clients. No matter the issue, we are here to help; however we can. Covering all bases is what we do. Contact our team today to find out more.

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