In today's business world, value creation for shareholder has become the buzzword of the 21st century. But what really is value, how is it measured and how is it used? Valuations can be used in:

  • Estimating the value of alternative corporate and business strategies. Strategies may include initiatives such as new product introductions, capital expenditures, joint venture activities, and new market entries.

  • Assessing major transactions such as mergers and acquisitions, divestitures, recapitalizations of debt and equity, and share repurchases.

  • Reviewing and targeting the performance of your business operations.

  • Communicating with key stakeholders such as company shareholders and employees.

While many companies have a need for capital, few know what the actual market value of that capital should be. When selling equity in a venture, a valuation is the only way to determine within reason the true market value of the equity being sold. The same is true for selling off a division or an entire company or for purchasing a division or company.

A complete valuation can save a company hundreds of thousands of dollars and many hours of valuable time. Unrealistic ideas of value can lead to a never ending search for the right "angel" to come along while diverting attention from a successful operation, causing great harm that is very often irrevocable.