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Business Valuation
We carried the valuation assignment for an entity in the clothing sector. We produced a 50 page Due Diligence and Business Valuation Report.
Client
Docupro UK Limited
Date
March 24, 2025
Category
Ad-hoc Services
Location
Queenborough, Kent, United Kingdom
Project Overview
The objective of this valuation is to estimate the Fair Market Value of 100.00% of the ordinary shares of Docupro UK Limited as at March 31, 2024 for the purpose as agreed by the stakeholders.
Fair Market Value is the price, in terms of cash or equivalent, that the buyer could reasonably be expected to pay, and a seller could reasonably be expected to accept, if the business were exposed for sale on the open market for a reasonable period of time, with both buyer and seller being in possession of the pertinent facts and neither being under any compulsion to act.
The objective of this valuation is to estimate the Fair Market Value of 100.00% of the ordinary shares of Docupro UK Limited as at March 31, 2024 for the purpose as agreed by the stakeholders.
Fair Market Value is the price, in terms of cash or equivalent, that the buyer could reasonably be expected to pay, and a seller could reasonably be expected to accept, if the business were exposed for sale on the open market for a reasonable period of time, with both buyer and seller being in possession of the pertinent facts and neither being under any compulsion to act.
A number of valuation methods were reviewed including; Net Asset Valuation, Price to Earnings Valuation, Discounted Future Earnings Valuation and relative market comparable valuation techniques. We also assessed the growth potential and financial sustainability of Docupro considering the current run rate of operations and future prospects.
The specific business valuation method employed for Docupro’s valuation are listed below with reasons why we deployed each methodology;
- The Net Asset valuation method which is generally considered to yield the minimum benchmark of value for Docupro represents the equity of the business after assets and liabilities have been adjusted to their fair market values. The Net Asset Value method assumes that the value of a business will be realised by the hypothetical sale of its net assets as part of a going concern.
- The P/E valuation method compares the earnings of Docupro to the prices of similar companies operating in the same industry that are either publicly traded or, if privately-owned, have been sold recently. In its application, a value adjusted multiple for a comparative company was computed and applied to the adjusted profits of Docupro.
- Under the Discounted Future Earnings method, the normalised historic earnings and prospective investment projects of Docupro are projected into the future and capitalised at a rate that reflects the risk inherent in the expected future growth in those earnings. The capitalised earnings are discounted to present values at a rate that reflects the risk inherent in the projected earnings
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