The benefit of valuation:

Every company is unique and CFK Finance offers personalised valuation studies. The approach to valuing a young company with strong growth potential and a company that has attained a steady momentum, sitting on a comfortable level of equity accumulated over many years, cannot be the same.

Prior to any valuation, CFK Finance therefore conducts a thorough financial analysis to determine where your company creates value, what its strengths are but also its weaknesses before replacing it in its immediate competitive context.

From this analysis, we work out the best approaches to reach the fairest price.

In terms of value, CFK Finance provides you with guarantees that few other companies can combine:

• with an average of 40 annual transactions in all business sectors, CFK Finance is a market maker and our estimates are based on this market reality;

• the transactions carried out are usually negotiated at +/- 10% of our valuation;

• over more than 10 years, CFK Finance has built up a solid and high-quality database of comparables for SME/SMI transactions.

In a sale project, the objective valuation of shares is essential. Our very pragmatic approach – and thereby different from accounting or insurance values approaches – will provide you with very precise information on the optimal conditions for the performance of your assets.

Valuation methods:

According to the profile of the company and essential aspects that characterise it through its financial analysis, we use very different methods while placing a particular emphasis on the study of intangible capital:

• human capital (the intuitu personae of the executive, the presence of key staff, the sum of individual skills, the experience, the collective expertise). We take into account the quality and the potential of the staff. Within the framework of a transaction, the ability of the company to demonstrate this knowledge, and therefore be able to convey it, will positively influence the valuation of the company. Conversely, the presence of key staff alone holding a part of the expertise of the company will weaken this valuation, as will a strong “intuitu personae” of the company head.

• client capital (retention, the largest client share in the turnover, influential geographical area). The entire qualitative dimension of the business distinguishes two companies which achieve an equivalent turnover and enables us to assess which will be the one to create value in the future. The ability to retain its clients, turnover recurrence, and the strength of a business model are some of the key factors in improving the valuation. Within the framework of a transaction, the risk linked to the loss of a large client shall be studied in particular.

• product capital (patents, trademarks, product awareness, the degree of innovation, right to lease, human capital, NULL, organisation capital). The products may be the main element of the value of a company. This is true for young or more innovative companies. During a transaction, the ability of the products to generate cross-sales with those of the buyer will be a key criterion.

Through our varying approaches, we determine the value of your company on the basis of these economic performances and its development potential, but also by comparing with other listed companies or companies that have recently been the subject of transactions.

Mixed methods

From the accounting status, we proceed with:

• the revaluation of the company’s assets (brand valuation, intangible assets, goodwill and intangible capital – as specified above, production equipment, inventory, accounts receivable) to reflect their economic value as accurately as possible;

• the inclusion of elements that are not included in the accounts (revaluation of property funded by financial lease, financial commitments given and received) and which, nevertheless, have an economic value;

• the reclassification of expenses that are not essential to the operation and which represent significant savings in order to reflect the immediate profitability potential of the structure.

The entire value of this work lies in the relevance of the revaluations adopted to express as closely as possible the economic and non-accounting value of your company. These methods are recommended to approximate the value of companies that have attained a steady momentum on a mature market.