The question of the company "value" can arise in connection with purchases and sales of enterprises, structural changes, stock market entrance or share capital increase, in compensation cases or in all kinds of disputes. There are three difficulties that characterize the solving of this issue: First, the circumstances of the company (structure, contracts, annual reports, tax risks) have to be examined carefully in the course of a due diligence to settle a factually thorough starting position. Second, the focus can lie on different interests: position of the buyer or the seller, market assessment, tax acceptability, domestic or international perspective, business preservation etc.

Third, the parties have to either agree on an appraisal procedure (beforehand contractually or on the occasion of the appraisal) or to transfer this task to an expert. Investment bankers assess in a different way than auditors, the management theory is controversial: revenue procedure, discounted-cash-flow, APT, comparable-company analysis, profit multiplication method, book value method, net assets valuation, turnover method, Stuttgart method and many more. Industry know-how is essential.

Incidentally, business appraisal is not only an issue for big corporations but also for firms of any legal form and size, especially for middle-sized enterprises and free-lancers.


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