Business Valuation

In addition to asset valuation, Coding and Preparation of Assets Register, TAL carries out business valuation for going concerns. Business valuation is necessary when an already established business is changing hands, or when a joint-venture partnership is sought, or when a merger or diversification is needed.

The logic and framework under which business valuations are carried out is through the determination of the income generating potential of the business.  TAL then in carrying out business valuation looks at how the resources available to the business are likely to generate income into the future (i.e. the value of the firm’s future income flow). The resources include human, machinery, land, capital, equipment and goodwill.

The setback with most of the business valuation theories is that they assume the existence of capital markets where the prices of securities are determined by the forces of demand and supply.  In Tanzania there are no enough capital markets and the only market (DSE) is at its infancy.  It will take time before these markets are operative in full swing.  This calls for a need of professional business valuers like Trace Associates.  The on going trade liberalization and the privatization process cannot be carried out without proper determination of prices or values of business in question.