EQUITY & SHARE VALUATION
Understanding the Value of an Ownership Interest
Equity and share valuation involves assessing the value of an ownership interest in a company based on its financial performance, business characteristics, capital structure, market conditions and the purpose of the engagement.
EQUITY & SHARE VALUATION
VALUE DEPENDS ON
THE BUSINESS.
THE INTEREST.
THE PURPOSE.
Understanding value at the level of ownership.
A STRUCTURED APPROACH TO EQUITY VALUATION
Pensar Valuation considers the financial, operational, ownership and market characteristics relevant to the company and the interest being valued.
​
Depending on the assignment, analysis may consider factors such as financial performance, future prospects, capital structure, shareholding, rights attached to the interest, market evidence, liquidity and other relevant considerations.
​
Equity and share valuation may support transactions, investments, fundraising, shareholder matters, financial reporting, regulatory requirements and other corporate decisions.
WHY EQUITY VALUATION MATTERS
When Is Equity & Share Valuation Required?
Equity and share valuation may be required in connection with transactions, investments, ownership changes, financial reporting and regulatory or corporate requirements. The purpose of the engagement determines the relevant scope, valuation date and analysis.
SHAREHOLDER TRANSACTIONS
Valuation support for transfers, acquisitions, disposals and other transactions involving equity interests or shares.
FINANCIAL REPORTING
​Valuation support for applicable fair value measurement and financial reporting requirements.
INVESTMENT & FUNDRAISING
Supporting investment decisions, fundraising and capital allocation involving an ownership interest.
REGULATORY & TAX REQUIREMENTS
Supporting applicable regulatory, tax and statutory valuation requirements relating to shares or equity interests.
M&A & CORPORATE TRANSACTIONS
Supporting mergers, acquisitions, business sales and other transactions where equity value is relevant.
CORPORATE RESTRUCTURING
​Valuation support for restructuring, reorganisation, ownership changes and other corporate matters.
The purpose of the valuation determines the relevant analysis.
The appropriate assessment depends on the company, the interest being valued, the valuation date, available information and circumstances of the engagement.
Our Approach.
Our Equity & Share Valuation Process
Each equity or share valuation engagement is shaped by the company, the ownership interest being valued, the purpose of the assignment and the information available. Our approach combines financial analysis, ownership considerations and relevant market evidence to develop a reasoned valuation conclusion.
2
1
3
4
5
DEFINE
UNDERSTAND
ASSESS
VALUE
REPORT
Understand the requirement
Assess the company and interest
Evaluate relevant value drivers
Apply appropriate valuation analysis
Document the valuation conclusion
Establish the valuation purpose, relevant valuation date, company, ownership interest and scope of the engagement.
Review the company’s financial performance, business model, capital structure, shareholding and characteristics of the interest being valued.
Consider financial performance, future prospects, industry and market conditions, ownership rights, liquidity and other relevant factors.
Consider relevant valuation approaches, market evidence, assumptions and other factors appropriate to the company, interest and purpose of the engagement.
Present the relevant methodology, assumptions, analysis and resulting conclusion in an appropriate report format.
VALUATION CONSIDERATIONS
Factors That Influence Equity & Share Value
The value of an equity interest can be influenced by financial, operational, ownership and market factors. The relevance of each consideration depends on the company, the nature of the interest and the purpose of the valuation.
01
FINANCIAL PERFORMANCE
Revenue, profitability, cash flows, margins, historical performance and other relevant financial trends.
03
CAPITAL STRUCTURE
Debt, equity, financing arrangements and other aspects of the company's capital structure that may affect equity value.
05
INDUSTRY & MARKET CONDITIONS
Industry outlook, competition, market dynamics, comparable market evidence and broader economic conditions.
02
FUTURE GROWTH & PROSPECTS
Expected growth, business plans, scalability, future earnings potential and the factors supporting the company's outlook.
04
OWNERSHIP RIGHTS & INTEREST CHARACTERISTICS
Shareholding, rights attached to the interest, voting or economic characteristics and other relevant ownership considerations.
06
LIQUIDITY & MARKETABILITY
The characteristics of the ownership interest and relevant considerations affecting its transferability or marketability, where applicable.
Equity value is influenced by more than the underlying financials.
The relevant company, ownership and market factors are considered in the context of the valuation purpose and available information.
VALUATION DELIVERABLES
What an Equity & Share Valuation Report Covers
An equity or share valuation report presents the relevant company and ownership information, scope of the engagement, valuation analysis, assumptions and resulting conclusion in a structured format appropriate to the purpose of the assignment.
01
COMPANY & INTEREST
Defining what is being valued
Company identification, ownership interest, relevant rights or characteristics, valuation purpose, valuation date and scope of the engagement.
03
VALUATION ANALYSIS
Applying the appropriate analysis
Relevant valuation approaches, market evidence, assumptions, calculations and other analysis appropriate to the company, interest and purpose.
02
FINANCIAL & OWNERSHIP ANALYSIS
Assessing relevant information
Financial performance, capital structure, shareholding, ownership characteristics and other relevant company-specific considerations.
04
CONCLUSION & REPORTING
Presenting the valuation conclusion
A structured presentation of the methodology, key assumptions, analysis and resulting conclusion of value.
Clear analysis. Reasoned conclusion. Appropriate reporting.
The scope and level of detail of the report depend on the purpose and circumstances of the engagement.
