Asset valuations are critical for businesses to accurately assess the worth of their tangible and intangible assets, enabling strategic decision-making, regulatory compliance, and optimal financial positioning. ValuStrat delivers a transparent and standards-driven process, providing clear, precise valuation reports in line with RICS and TAQEEM guidelines. Our services span real estate, industrial assets such as machinery, and intangible assets including intellectual property and business goodwill. With a proven track record, our valuations are trusted by over 120 financial institutions across the EMEA region. We have been ranked in the highest category by the Dubai Land Department (DLD) and the Real Estate Regulatory Agency (RERA), and recognised by Consultancy Middle East for excellence in real estate and banking sector advisory. As a RICS-regulated firm and the first RICS tech partner in the Middle East, Asia, and Africa, with a strong UK network, ValuStrat combines global standards with deep regional expertise to deliver trusted valuation outcomes.

What is valuation?

Valuation, in its essence, refers to the systematic process of determining the economic worth of an asset or a business entity. Utilising a variety of methodologies and techniques, valuation aids in ascertaining an appropriate value, which serves as a critical component for various purposes such as investment analysis, capital budgeting, merger and acquisition transactions, or litigation support. The precise methodology employed for valuation may vary depending on the context, the nature of the asset, and the purpose of the valuation exercise. Ultimately, the objective of valuation is to provide an informed basis for decision-making in financial and strategic matters.

How is a valuation calculated?

A valuation is calculated by applying specific methodologies tailored to the asset or business entity under consideration. Typically, three primary approaches are employed: the income approach, the market approach, and the asset-based approach. The income approach estimates future cash flows and discounts them to present value using a discount rate. The market approach compares the subject entity to comparable entities within the market, drawing upon relevant ratios and multiples. On the other hand, the asset-based approach appraises the underlying assets and liabilities of the entity. The chosen methodology hinges upon the context, nature of the asset, and the purpose of the valuation.

What is the purpose of the valuation?

The purpose of a valuation is to ascertain the economic worth of an asset or business entity, facilitating informed decision-making in various financial and strategic contexts. Valuation serves multiple purposes, including investment analysis, wherein investors utilise valuations to gauge the attractiveness of potential investments. In capital budgeting, businesses employ valuation to evaluate the financial feasibility of projects. Merger and acquisition transactions necessitate valuations to negotiate equitable deals, whilst, in litigation support, valuations are crucial for resolving disputes or estimating damages. Furthermore, valuations aid in financial reporting, tax planning, and regulatory compliance, underscoring their significance in numerous financial scenarios.

What are the different types of valuation?

Various types of valuation methodologies exist, each suited to specific contexts and purposes. The three primary types are the income approach, the market approach, and the asset-based approach. The income approach, which includes the Discounted Cash Flow (DCF) method, estimates future cash flows and discounts them to present value. The market approach, encompassing Comparable Company Analysis (CCA) and Precedent Transaction Analysis (PTA), relies on comparisons with similar entities or transactions within the market. Lastly, the asset-based approach, which involves the Net Asset Value (NAV) and Liquidation Value methods, assesses the underlying assets and liabilities of the entity. The choice of methodology depends on the asset's nature and the valuation's purpose.

Will my property be inspected during property valuation?

During a property valuation, it is customary for the property to be inspected to obtain an accurate and comprehensive assessment of its value. An inspection allows the valuer to examine various factors that influence the property's worth, including its condition, size, layout, location, and the presence of any improvements or modifications. Furthermore, the inspection aids in identifying potential defects or issues that may affect the property's value. Such a thorough examination is integral to the valuation process, as it ensures that the resulting valuation accurately reflects the property's true economic worth, enabling well-informed decision-making. However, in some cases, a desk-top-based evaluation can be used instead of a full-site inspection – based on the purpose of valuation.

What are the methods for valuing a company?

Valuing a company entails the application of several methodologies, each suited to specific contexts and purposes. The three primary methods are the income approach, the market approach, and the asset-based approach. The income approach, which encompasses the Discounted Cash Flow (DCF) method, estimates future cash flows and discounts them to present value. The market approach, comprising Comparable Company Analysis (CCA) and Precedent Transaction Analysis (PTA), compares the subject company to similar entities or transactions within the market. Finally, the asset-based approach, featuring the Net Asset Value (NAV) and Liquidation Value methods, evaluates the company's underlying assets and liabilities. The chosen method depends on the company's nature and the valuation's purpose.

What should valuation analysis include?

A comprehensive valuation analysis should encompass several vital elements to accurately estimate an asset or business entity's economic worth. Firstly, it should incorporate a thorough examination of the subject's financial statements, historical performance, and industry trends. Secondly, depending on the context and purpose, the analysis must employ a suitable valuation methodology, such as the income, market, or asset-based approach. Additionally, the valuation should consider any potential risks or opportunities affecting the asset's value. Lastly, the analysis ought to present a detailed rationale for the chosen methodology, assumptions, and calculations, providing a transparent, defensible, and well-substantiated valuation.

How to value a pre-revenue startup?

Valuing a pre-revenue startup involves assessing various non-financial factors due to the lack of traditional revenue streams. Key considerations include the startup's market size and potential, the uniqueness of its product or service, the strength and expertise of its management team, and its technological innovation. These elements are analysed to estimate the startup's potential worth and market positioning, which is crucial for attracting investments or strategic partnerships. This valuation process focuses on the startup's growth prospects and current developmental stage.