How can Audit Firms in Dubai Help you with Business Valuation?

Many investors think intelligent decisions are required when they buy or acquire a new company or startup. The truth is intelligent decisions are not only about buying well but also about selling well, especially by leveraging the worth of your business. Organisations approach audit firms in Dubai for business valuation services for reasons such as better corporate governance, regulatory requirements or to better understand an entity’s value to make good decisions.

In all these scenarios, the company finds itself at a critical juncture. You may be heading for an acquisition, resolving a dispute with a partner or wishing to narrow the gap between intrinsic and market value. Carrying out a business valuation with the help of audit firms in Dubai is how you can resolve all such matters. In this blog, we help you understand the importance of business valuation and how audit firms in Dubai can help you. Audit firms can help organisations with the following applications of business valuation services:

Financial Reporting

Financial reporting includes allocating buying costs, goodwill impairment tests, portfolio assessment and other actions. Business valuation becomes necessary when a company buys another company and calculating the amount charged for each asset and liability is required. The buying company then evaluates the goodwill of the business to determine the cost it lost due to the transaction. Portfolio assessments are often performed by fund management companies for purposes such as investor monitoring, financial analysis, audits, and regulatory compliance.

Business Transactions 

Business transactions include an exit strategy, mergers & acquisitions, financial management, and other critical financial operations. If a company is considering an IPO, audit firms in Dubai can perform a business valuation to enable the investors to make intelligent decisions on whether to subscribe to an IPO or not. When a company is planning to buy another company, the buyers will conduct a valuation to assess whether the price they pay is reasonable or not. Furthermore, companies that seek financing require to conduct a valuation of the assets before the funding is supplied.

Business Litigations

Litigations include conflicts between shareholders, bankruptcies, damage assessments, purchase of shares and other aspects of business litigations. When there is a shareholder dispute, audit firms in Dubai can perform a valuation to determine how much each shareholder is owed when the company is liquidated. Similarly, when a company goes bankrupt a valuation of assets & liabilities is required to reach an agreement between shareholders and debtors. When a verdict is delivered, a valuation performed by audit firms is required to assess the damages to be awarded.

Significance of Business Valuations in Dubai, UAE 

Business valuation performed by audit firms in Dubai is a critical process by which companies can determine the true value of their assets. Getting valuable knowledge about the true value helps the businesses to align their operations with the current situation and to achieve desired results in the future. Business valuation also helps to make the right investment decisions at the right time.

For example, a company is engaged in a profitable business in Dubai and is now forced to take a critical decision about a major expansion plan. The company is receiving various investment offers at different price ranges. Here, the company requires a business valuation service to analyse each of those investment options and determine whether those prices reflect their true value. In such a scenario audit firms in Dubai can help that company in performing the analysis and empower them to make a strategic business decision.

Various Methods of Business Valuation  

There are several methods used to perform business valuation in Dubai. It may vary depending on the requirements or the situation that warrants a valuation. However, some of the common methods used by audit firms in Dubai are listed below:

Asset-Based Method 

This method of business valuation focuses on the underlying assets of the company.

Income-Based Method 

This involves calculating the present value of the prospective earnings or expected future cash flows from the business in question

Market Value-based Method 

Market Value-based approach is feasible only if the market value of a similar business is easily available or easily determined

How can Jitendra Chartered Accountants Help you? 

Auditors in Dubai can help you make a sound decision when you are faced with situations such as buying or selling a business, engaged in a dispute with shareholders, facing bankruptcy, planning a new expansion etc. In all these situations you will be needing to conduct a business valuation of your company’s assets and liabilities to determine its true worth. For carrying out a business valuation and making better decisions, you can avail of the services of the best audit firms in Dubai such as Jitendra Chartered Accountants (JCA).

By availing of JCA’s audit services in Dubai, you get to work with a team of qualified professionals. JCA has more than 20 years of experience in the UAE and has served clients from all kinds of industries irrespective of the size of their business and assisted entrepreneurs in making the right decision.