Company valuation – a well-founded view of your company's value
Valuation matters when a significant decision about ownership or the company's future is ahead. We aim to provide an understandable, well-founded view of value – not just a number produced by one formula.
When an important ownership decision lies ahead
Typical situations include selling or buying a company, business succession, a share exchange, arrangements between shareholders, financing discussions and strategic planning.
- Before selling a business
- When buying a company
- For a share exchange or other corporate restructuring
- In business succession
- When a shareholder joins or leaves
- When buying out an ownership interest
- In discussions with lenders or investors
- To support strategy and shareholder value
What is a company worth?
Value is not the same as book equity. For a profitable company it is often driven primarily by its ability to generate future cash for owners. We also consider assets, liabilities, risks, market position and prospects.
Earnings and cash flow
We assess future earnings capacity or cash flows and convert expected returns into present value.
Especially useful when the future of the business can be forecast with reasonable confidence.
Valuation multiples
Profit, EBITDA or another measure is compared with market multiples or comparable transactions.
Judgement matters: the same multiple does not suit every sector or company size.
Asset-based value
We consider the fair market values of the company's assets and liabilities.
Especially relevant for asset-rich businesses. For a profitable service firm, assets alone may understate the business's value.
The best picture often comes from several methods together. See the worked example in how a company is valued.
How JTT approaches valuation
- 1
Define the purpose
We establish why the valuation is needed. A transaction, tax matter, shareholder arrangement or internal strategy may call for different approaches.
- 2
Analyse financial information
We typically review several years of financial statements and, where needed, current monthly reports and forecasts. We adjust figures where necessary to reflect normal earning capacity.
- 3
Understand the business and risks
A spreadsheet alone cannot show value. We assess market developments, customer and supplier concentration, competitive advantages, key-person risks, investment needs, growth prospects and reliance on the current owner.
- 4
Apply suitable methods
We select methods appropriate to the situation and arrive at a reasoned estimate or range of values.
- 5
Review the findings together
Valuation is not a black box. We explain what drives value, which assumptions matter most and how changes in circumstances could affect it.
A written valuation report
Clients always receive a written report containing:
Methods and assumptions
The methods used and the key assumptions.
Rationale
Reasons supporting the value or valuation range.
Sensitivity analysis
How key assumptions affect the outcome.
Expert review
An expert-led discussion of the findings.
Analysis, transaction experience and an auditor's perspective
Banking experience
Antti Pekkarinen, who leads the corporate transactions service, has a background in investment and corporate banking, transactions and financing.
Auditors under the same roof
The team brings together financial analysis, M&A experience and auditors' knowledge of company reporting.
Standalone or integrated
Valuation can be a separate assignment or part of a wider sale or ownership arrangement.
Antti Pekkarinen
M.Sc. (Econ.) · CEO · Partner
Tell us briefly about the company and why you need a valuation. We can then assess the scope of work, timetable and fee.
Arrange a free initial discussion
Together we can clarify why the valuation is needed and what kind of assignment suits your situation.
Wondering when's the right time to reach out?
Better too early than too late. A 30-minute free consultation will move you forward.