VALUATION Corp. provides shares valuation services in Moscow and other Russian regions
Shares (stock) valuation actually means determination of the value of the exact part of subject company (business) attributable to the amount of shares in question. Valuation can be conducted to determine fair market value of ordinary or preference shares issued by public or private joint-stock companies.
Valuation of shares is mostly based on determining the value of subject shares as a financial instrument generating profit for its owner. The principal forms of income are dividends and equity price rise due to improved financial performance of the company, growth of business and its assets. Therefore, the principal methods of shares valuation are the capital market method, net asset value method, discounted cash flow and income capitalization methods.
The size of the subject block of shares is also very important for valuation. E.g. valuation of a controlling block usually warrants a premium for control, i.e. for the ability of its owner to appoint members of the management team and conduct management of the company. The control premium may amount to 30 – 40 percent of the average price calculated on the basis of the value of business and number of issued shares, while the minority discount may come up to 20 – 30 percent of this price. Furthermore, liquidity of the shares in question is an important characteristic significantly affecting the value of the subject. Shares of open joint-stock companies listed and traded on a stock exchange have the highest liquidity, while shares of private joint-stock companies have the lowest liquidity.
Documents and information required for valuation of shares:
- Copies of company's incorporation documents (Articles and Memorandum of Association, Certificate of Registration).
- Brief description of major activities and organizational structure of the company.
- Financial reporting documents for the last 3-5 years (or for a feasible number of prior periods):
- balance sheet
- Most recent auditor’s report (if audited).
- Fixed assets schedule.
- Property inventory lists.
- Information about all assets (real estate, inventories, shares of unrelated companies, bills, intangible assets, etc.)
- Analysis of accounts payable.
- Analysis of accounts receivable:
- aging analysis;
- by categories of receivables;
- doubtful debts analysis.
- Information about affiliated companies (if any) and their financial documents.
This list of documents is preliminary and may be reduced or expanded after the valuer’s detailed review of the valuation assignment, depending on the purpose of valuation.
Should you have any queries regarding shares valuation in Russia, please contact us.
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