Going Concern Value

Definition

Going concern value refers to the total worth of a business when it is expected to keep operating in the future. It includes the value of its assets, customer base, reputation, and potential earnings. This value is higher than the value of selling off the business in pieces. It helps buyers and investors understand the overall value of the business considering its ongoing operations and future potential.

Further Explanation

Going concern value refers to the total value of a business when it is expected to continue operating as a going concern. It represents the value of the business as an ongoing entity, including its tangible and intangible assets, customer relationships, brand reputation, and potential future earnings.

The going concern value assumes that the business will continue to operate in the foreseeable future and generate cash flows. It considers factors such as the company’s existing customer base, established operations, market position, and growth potential.

When valuing a business as a going concern, various methods can be used, such as discounted cash flow analysis, which estimates the present value of the business’s expected future cash flows. Other valuation techniques, such as market multiples or income capitalization, may also be employed.

The going concern value is different from the liquidation value, which represents the worth of a business if it were to be liquidated or sold off in pieces. Going concern value typically reflects a higher valuation because it includes the potential earnings and long-term prospects of the business.

Determining the going concern value is important in situations such as business acquisitions, mergers, or investment decisions. It helps potential buyers or investors assess the overall value of the business, taking into account its ongoing operations and future earning potential.

In summary, going concern value refers to the total value of a business as an ongoing entity, assuming it will continue to operate in the future. It incorporates the company’s assets, market position, customer relationships, and potential future earnings. This value is higher than the liquidation value and is used in various business valuation scenarios.

Why Appoint Valtech as Valuation Adviser?

Valtech’s team has provided valuation advice to over 200 listed companies in Hong Kong, China, Singapore, Taiwan, Australia, the United Kingdom, the United States and Germany.

Valtech Valuation is a professional valuation firm accredited with ISO-9001 in valuation advisory services. The financial market and valuation requirements are highly dynamic. We are determined to develop and maintain a quality management system to foster an environment which is sustainable and evolving continuously. Our founders stress on development of a system and an environment that our consultants are provided with necessary support and opportunities to thrive.

We are a team of professionals from multiple disciplines including audit, financial modelling, tax, internal control and surveying. Our management adheres professional excellence. Abundant resources are reserved to develop standardized policies and procedures for quality control. We have solid track record in valuation advisory for listed companies, private equity, fund managers and financial institutions. We work closely with big four and other international accounting firms, corporate financial advisors, fund managers and legal advisors.

Valtech Advantages:

Advanced Valuation Techniques: Valtech Valuation can develop and implement advanced valuation techniques that are specifically tailored to the needs of clients. These techniques can go beyond traditional valuation methods and incorporate factors such as market trends, industry benchmarks, and risk analysis to provide more accurate and insightful valuations.

Customized Valuation Models: Valtech Valuation can create customized valuation models that align with the unique investment strategies and asset classes. By understanding the specific requirements and objectives of these entities, Valtech Valuation can develop models that capture the nuances of their portfolios, resulting in more precise and relevant valuations.

Data-driven Insights: Valtech Valuation can leverage its access to comprehensive data sources and analytics tools to provide data-driven insights. By analyzing market data, economic indicators, and performance metrics, Valtech Valuation can offer valuable insights into the valuation of assets, identify emerging trends, and help inform investment decision-making.

Adherence to Compliance and Reporting Standards: Valtech Valuation can ensure that valuation practices adhere to regulatory compliance and reporting standards. By staying updated on relevant regulations, such as accounting standards and industry guidelines, Valtech Valuation can help clients meet their reporting obligations accurately and in a timely manner.