Business valuation

Home Services Financial Advisory Deal Advisory Valuation Corporate valuation

BUSINESS VALUATION

SERVICES

CONTACT

APPROACH

FAQ

Business valuation

Business valuations often serve as the starting point for price negotiations, shareholder decisions, and restructuring measures—whether involving a purchase or sale, the entry or exit of shareholders, or severance situations. The determined value directly influences negotiating position, structuring, and the quality of decision-making.

A well-founded valuation does more than just assign a numerical value: it makes value drivers transparent, identifies realistic ranges, and translates assumptions into concrete pricing implications. This provides guidance in negotiations and certainty at the management and board levels.

Let’s work together to determine which type of business valuation makes the most sense for your situation.

WTS für Unternehmensbewertung

Warum WTS

We view business valuation as a structured, event-driven analytical process. Depending on the purpose of the valuation, the role of the valuer, and the required level of detail, the starting point is a thorough understanding of the business model, the financial projections, and the key value drivers. Building on this foundation, we develop consistent valuation models that integrate economic logic, available market data, and recognized valuation standards. Our particular strength lies in combining valuation methodology with transaction experience. As an independent advisor with no self-audit risk, we represent the economic interests of our clients.

Our business valuation services

Valuation Report in accordance with IDW S1

We prepare reliable valuations of companies and business units to serve as a basis for pricing, structuring, and corporate governance decisions. Depending on the reason for the valuation and the role of the appraiser, we transparently derive, in particular, objective enterprise values or plausible decision-making values, document key assumptions in a traceable manner, and present the results in a decision-oriented format. In doing so, we develop or review integrated planning and valuation models and work closely with our Financial Modeling Team to consistently link business planning, value drivers, and valuation logic.

Our Focus Areas

Preparation of valuation reports in accordance with IDW S 1
Derivation of objective enterprise values and plausible decision-making values
Consideration of valuation premises, valuation concepts, and valuation purposes specific to the valuation occasion
Creation, further development, or review of integrated planning and valuation models
Transparent documentation of valuation methodology, assumptions, and results

Indicative Company Valuation

We prepare indicative business valuations to provide a quick and reliable assessment of a company’s value during the early stages of decision-making, transactions, or restructuring. In particular, these valuations serve to derive value ranges, identify key value drivers, and present pricing implications in a clear and understandable manner for management, shareholders, or transaction teams. The scope, methodology, and level of detail in the documentation depend on the specific reason for the valuation, the available information, and the intended purpose of the decision. Indicative valuations are therefore decision-oriented value estimates and should not be equated with a comprehensive valuation report.

Our Focus Areas

Preparation of indicative business valuations and value ranges
Assessment of asking prices and structuring options
Analysis of key value drivers, sensitivities, and scenarios
Plausibility checks based on market- and transaction-related multiples
Decision-oriented presentation of results for management and governing bodies

Valuation Support in Buyer and Seller Processes

We support business valuations in the context of transactions and ensure a consistent integration of valuation, financial analysis, and negotiation strategy. Working closely with our M&A and financial due diligence teams, we holistically integrate valuation assumptions, financial insights, and deal structure. The goal is to derive robust price implications and establish a clear position in negotiations.

Our Focus Areas

Deriving price implications from valuation and due diligence results
Scenario and sensitivity analyses of key valuation parameters
Support in justifying purchase price ranges
Preparation of decision-making documents for management and governing bodies

Main Contact

Dr. Rainer Doll

Partner Advisory

Munich

+49 89 28646 2716

View Profile

Main Contact

Christian Hörmann

Partner Advisory

Munich

+49 89 28646 1886

View Profile

Main Contact

Thomas Kuehl

Partner Advisory

Deal Advisor

Frankfurt

+49 (0) 151 55977264

View Profile

Our Approach to Business Valuations

The focus of our approach is on transparently deriving reliable valuation ranges – not calculated in isolation, but validated based on the specific valuation context and level of detail through market multiples, sensitivity analyses, and a structured review of planning assumptions. This makes it possible to quantify opportunities and risks and to understand the implications for pricing.

Step 1

Plausibility Check of Business Planning

Based on historical data and the price-volume structure of your products or services, we verify the plausibility of your business plan. Using analyst estimates and market data from comparable companies, we validate your business plan and derive a range of revenue growth and margins within which your company should typically operate. We explain the assumptions underlying our calculations. If you do not have a business plan or only have a projected income statement, we are happy to assist you in preparing one, as well as in planning synergies for an upcoming M&A transaction.

Step 2

Discounted Cash Flow/Income Capitalization Method (DCF Valuation)

The core of the valuation process involves translating the company’s financial projections into an appropriate valuation method. We derive the cash flows from the projections, determine the cost of capital, the so-called terminal value, and ultimately the enterprise value. We typically use the WACC method as our standard approach; however, if requested, we also apply the income approach or other methods. When applied correctly, these methods yield the same result under the same assumptions and are both the most scientifically recognized and the most widely used in practice. The calculation of the so-called net asset value is structurally entirely different and is required in practice only in specific situations.

Step 3

Sensitization

As part of your business planning, we work with you to map out the expected future development of your company. Depending on the industry, such forecasts are subject to varying degrees of uncertainty. To provide you with transparency regarding the impact of alternative scenarios on the company’s value, as well as any estimation errors, we calculate corresponding sensitivities for the key parameters of the valuation.

Step 4

Multiple Valuation/Multiplier Method

The final validation of the result is performed by evaluating it using market multiples. Based on stock prices and M&A transactions of comparable companies, we derive EBITDA (earnings before interest, taxes, depreciation, and amortization), EBIT (earnings before interest and taxes), or other industry-specific multiples, which—when applied to the relevant financial metric of your company—provide a rough estimate of your company’s value. The enterprise value determined through the DCF valuation should fall within the range of the multiples, even though the two valuation methods follow very different approaches.

Frequently Asked Questions About Business Valuations

What is a business valuation?

A business valuation determines the economic value of a company as of a specific valuation date. The goal of a business valuation is to provide a sound basis for decision-making—for example, in the context of a business acquisition, sale, succession planning, equity investments, tax matters, or corporate law issues. This process takes into account financial metrics, future expectations, the market environment, risks, and the company’s earning power.

How do you calculate a business valuation?

A business valuation is calculated using different methods depending on the purpose of the valuation. The calculation is often based on future earnings or cash flows, which are discounted to their present value. A simplified formula is: Enterprise value = sustainable earnings / capitalization rate. In practice, financial projections, risks, growth, debt, market comparables, and industry-specific factors are also factored into the business valuation.

What methods are used in business valuation?

The most important methods of business valuation include the income approach, the discounted cash flow (DCF) method, the multiples method, and the net asset value method. The income approach and the DCF method are based on future financial surpluses. The multiples method compares the company with similar companies or transactions. The net asset value method, on the other hand, focuses primarily on the company’s existing assets.

Which financial metrics are relevant for a business valuation?

The key factors relevant to a company valuation include revenue, EBITDA, EBIT, net income, free cash flow, debt, working capital, capital expenditures, and growth rates. Qualitative factors such as customer structure, market position, dependence on management, scalability, industry trends, and risks also influence the valuation. Which metrics are particularly important depends on the business model, the industry, and the purpose of the valuation.

What are multiples in business valuation?

Multiples are factors used in business valuation to derive a company’s value based on comparable companies. Common multiples include revenue multiples, EBITDA multiples, and EBIT multiples. In the multiples approach, a company’s financial metric is multiplied by an appropriate industry multiple. Multiples typically provide an indicative company valuation and are particularly well-suited for verifying the plausibility of a valuation alongside other valuation methods.

Further topics you could be interested in

Purchase Price Allocation

Impairment test according to HGB and IFRS

Due Diligence

Fairness Opinion

Contact us today

Do you have any questions about our services or WTS? Please let us know. Please fill in our short contact form. We will get in touch with you as soon as possible.

Contact