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What is the company's valuation?

the company's valuation? It is a financial instrument that aims to determine Financial position and market value of the company In the business world, valuation is used by investors and shareholders to determine Total value of the company, and its ability to continue and grow in the competitive market.

Company Evaluation Objectives

• Clearly define the company's financial position.
• Measuring the company's ability to compete and continue.
• Comparing the company's position with competitors in the same sector.
• Helping management and investors make accurate strategic decisions.

Reasons for conducting a company evaluation

The evaluation process is conducted for several reasons, the most important of which are:

1. تحديد قيمة الاصول والموجودات الخاصة بالشركة.
2. Determine the value of the company's assets and holdings.
3. Calculate net worth of equity.
4. Evaluating the value of shares before they are offered on the stock exchange.
5. Evaluating partners' shares in cases of joining or separation.
6. Valuation of the company when selling part of it or when liquidating it.
7. Determine the fair value of the company in the event of Merger with other companies.

the company's valuation?

1. Prepare a comprehensive statement يتضمن كل ما تمتلكه الشركة من اصول، بالإضافة إلى الديون والالتزامات.
2. Apply one of the evaluation methods To know the current market value of the company.
3. Determine the rights and shares of shareholders in the capital.
4. Accurate review For all data and information via official reports (such as: bank certificates, customer and supplier approvals, warehouse inventory).
5. Preparing a final report To evaluate the company, it is formulated in accordance with financial and legal rules and presented to the Board of Directors for discussion and approval.

Methods of evaluating companies

Evaluation methods are divided into two types: Modern and traditional.

First: Modern methods for evaluating companies

1. Average annual profitCalculate the average earnings for at least three years and multiply it by 5–7 times (depending on the negotiation).
2. صافي قيمة الاصول: تقييم الاصول بالقيمة السوقية بعد خصم الالتزامات.
3. Team strengthThe human element is the cornerstone of the company’s success and continuity.
4. Company ageThe longer a company has been in business, the more accurate the valuation will be in terms of real growth.

Second: Traditional methods for evaluating companies

1. road Net book value of the company.
2. road Adjusted book value.
3. road Replacement value.
4. road Discounted cash flows (DCF).
5. road P/E ratio.
6. road Net market value.
7. road residual value.

📌 We will discuss these methods in detail in separate upcoming articles.

Conclusion

in evaluating companies It is not just a final number, but rather an integrated process that helps management and investors to Knowing the true value of the company...and determining its ability to continue and grow in the market. Whether the goal is to attract investors, launch a stock offering, or merge with other companies, a thorough evaluation is a strategic step to ensure the success of any financial or investment decision.