Economy
Business Valuation: What You Should Know Before Selling
Whether a sale is imminent or coming sometime in the future, every business should have a current valuation. Like business plans and resumés, valuations allow owners to leverage opportunities, protect their interests, and move quickly once they decide to sell. Here, we’ll outline a few things business owners and potential sellers should know about the valuation process.
Find the Right Reasons for Valuation
An accurate valuation is essential for various reasons. First, it keeps an owner from losing money, and second, it may work to reassure a reluctant buyer. Before working with a brokerage and obtaining a valuation, clean up your company’s financials. It may take time and effort, but it will pay significant dividends in the end. If you’re thinking of hiring a business broker, the team at CGK Business Sales is always ready to help.
If you need some assistance cleaning up your finances, you can always outsource and reach out to bookkeepers like Holbrook & Manter bookkeeping services. They can help you manage your financial reports and ensure that your books are organized to help you decide before you start working with a business broker. Having clean records will help the process run smoothly and prevent delays.
Valuations Help Sellers Get Fair Market Value and Increase the Chances of a Successful Sale
Of all the reasons to get a valuation, this is one of the most important. Many owners, especially those with small and family-run businesses, rely on sales to fund future opportunities or enjoy a more comfortable retirement. We’ve all heard stories about owners who sold their companies for much less than their market value, as well as those who priced their companies too high and could not find a buyer.
While hiring a valuation specialist may be costly, it’s a good long-term investment because of the future savings it brings. When a business is accurately valued, owners will be able to time sales properly, increase their negotiating power, and boost potential profits.
A Business Valuation Will Help an Owner Make More Informed Decisions
When valuing a business for sale, it’s important to consider the right factors. Accurate valuations allow owners to gauge performance and measure changes over time, which in turn, gives them the information needed to make strategic decisions.
The valuation process provides a holistic view of a company, helping potential sellers make decisions that increase their return on investment. Not only will a valuation keep you from making the wrong choices, but it will also prevent the consequences that may follow.
Making a Graceful Exit
When done properly, business valuations give owners a baseline from which other efforts can be initiated. The information gathered during a valuation will let you know whether the sale is going in a good direction or if improvements must be made before the company goes on the market.
The baseline shows prospective buyers how well the company is performing, which may reassure those who are unsure. Performing a valuation is like taking the pulse of a business, and it’s especially beneficial when an owner seeks to increase profits before the sale takes place.
Managing Plans of Succession
In some cases, business owners sell to family members. Alternatively, you may want to sell to a strategic buyer who can use existing revenue streams to generate more profits. No matter who the business is going to, it’s still important to know its actual value.
Helping Business Owners Accurately Value Their Companies
A business valuation may fulfil multiple functions, such as ensuring higher profits and providing a degree of reassurance to buyers and sellers. If valuations are used correctly, owners and potential buyers will know exactly what to expect from a company. Call the team at CGK Business Sales for valuation help and advice.
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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