Ignoring business valuations can lead to nasty tax surprises!

Various sections of The Income Tax Act, No. 58 of 1962, refer to and require the market value of assets. Determining an asset's market value is the Taxpayer's responsibility and the onus of substantiating a valuation rests with the Taxpayer. A poorly formulated or unsubstantiated valuation could lead to inaccurate tax assessments, penalties, and interest if

2023-09-04T11:13:55+02:004 September 2023|

Business valuations: Should you do it internally or hire an expert?

A business valuation is an important process that helps shareholders and management determine the worth of a company. It involves assessing various financial and non-financial factors to determine the value of a business. But often, the question arises: should you do the business valuation internally or hire an expert? This article will explore the factors that

2023-04-24T09:33:29+02:0024 April 2023|

How business value is influenced by 8 business functions

A business valuation is a process of determining the worth of a business entity, which is vital in mergers and acquisitions, partnerships, and strategic decision-making. As a business owner or director, building a high business valuation is crucial for the long-term success of your enterprise. A higher business value is not a random event or a

2023-04-18T17:25:59+02:006 April 2023|

How to determine Beta in a business valuation

The weighted average cost of capital (WACC) is a crucial component in determining the valuation of a company. The WACC represents the average cost of the various sources of capital (debt, equity, and others) that a company raises to finance its operations. When valuing a private company, business valuers usually face the challenge of determining the

2023-03-02T09:07:03+02:002 March 2023|

Know your terms: business valuation versus business evaluation

The terms "business valuation" and "business evaluation" are frequently employed interchangeably, but they have significant dissimilarities that are worth comprehending. A business valuation involves determining the financial worth of a company. It is a quantifiable analysis that aims to estimate the value of the business considering various financial and non-financial elements, such as profits, liabilities, market

2023-02-21T09:05:02+02:0021 February 2023|

Calculate synergies from a merger

The DCF (Discounted Cash Flow) valuation is a widely used financial tool to determine the present value of a company's future cash flows. It's commonly used in mergers and acquisitions to assess the expected financial benefits of the deal, including the synergies that would result from combining two companies. Synergies refer to the benefits of combining

2023-02-09T08:17:14+02:009 February 2023|

Know your terms: Business Valuation vs Business Appraisal

When assessing the Worth of a business, two terms often used interchangeably are "business valuation" and "business appraisal". According to the Merriam-Webster dictionary, the definition of "business valuation" is "the act or process of determining the value of a business or of a business interest." On the other hand, "business appraisal" is defined as "the act

2023-02-06T13:51:12+02:006 February 2023|

Accountants: Are you a value builder or a scorekeeper?

Many accountants undertake only annual accounting assignments, while others also compile monthly management accounts. Chances are good that there is always an element of consulting involved, whether it be tax consulting annually, monthly or on an ad-hoc basis. When you compile monthly management accounts, you may be more closely involved with critical business decisions. Are you

2022-11-10T11:15:01+02:009 November 2022|

How do rising and falling interest rates affect a business valuation?

A topical issue for investors right now is the fact that stock prices are affected due to a hike in interest rates. As we currently find ourselves in a rising interest rate cycle, it is critical to consider the effect of interest rate changes in a theoretical and quantitative sense, as opposed to the market sentiment.

2022-03-31T14:47:48+02:0031 March 2022|

How is risk applied in a business valuation?

A previous article explored the relationship between risk and required returns, specifically in the context of a business valuation, highlighting the inverse correlation between risk and business value. But how is this risk quantified and applied in a business valuation? This is subject to the valuation method. Allow us to explain. The enterprise value (EV) calculated

2022-03-24T11:51:31+02:0023 February 2022|
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