Normally, the development of objectives in the company valuation takes place in the environment of some kind of economic transaction. An enterprise has different value for different buyers and for the seller.
For example, a large, technologically advanced foreign company wishing to buy another well-known domestic company in order to enter our market, taking advantage of the reputation of the local brand, will only value the brand, but will only value the brand, but will not value the brand itself. will not value installations, machinery, etc.It has more advanced assets at its disposal.
The seller, on the other hand, will value his material resources very highly since they are in a position to continue producing. From the former's point of view, it is a question of determining the maximum value, and from the seller's point of view, it is a question of knowing what the minimum value at which he should sell will be.
These two figures are the ones that are confronted in a negotiation in which a price is finally agreed upon that is usually somewhere in between the two. A company may also be worth different values to different buyers for different reasons: different perceptions of the future of the industry and the company, different strategies, economies of scale, economies of complementarity, etc.
An assessment serves many different purposes:
Valuation is the means of justifying the price at which shares are offered to the public, which is an objective in the valuation of companies.
Valuation is used to compare the value of shares with the value of other assets.
The valuation of a company or business unit is fundamental to quantifying the value creation attributable to the management being evaluated.
The valuation of a company and its business units is a preliminary step to the decision to: stay in business, sell, merge, milk, grow or buy other companies.
There is also an intermediate position that considers the points of view of the buyer and seller and is represented by the figure of the neutral arbitrator. Arbitration is being used more and more frequently in disputes such as, for example, in the sale and purchase of companies, in the resolution of contracts or in cases of division of estates due to inheritance, among others.