Why is Doing a Proper Valuation Important for your Company?

Starting a company is more than just being able to comply with requirements. Here, valuation plays a central role as it allows companies to know what their current value is and creates realistic goals from there. 

Here are some points to help you understand why valuation is important for your company:

1. Sales Prospects

Understanding how much your company is worth is crucial when you're thinking about selling it. These exit plans require knowing the exact value of your company to determine the ideal selling price, which includes interest among other factors. 

 2. Business Planning

Mapping out your business plans requires you to maximize the use of all your available resources. 

Because your company's value is key in calculating your assets, it's important to incorporate your company's net worth into your business financial plans and consider it in every decision you make.

3. Tax Compliance

The Australian Tax Office (ATO) reinforces strict rules to ensure compliance among Australian business owners. Since your company’s actual financial position is part of the ATO’s calculation for your tax bills, you are obliged to undergo business valuation to keep your books in order. 

4. Resolving Shareholder Issues

Every now and then, company shareholders may not always agree on certain business decisions. During these times, proper valuation will give you the proper perspective when it comes to the complicated process of resolving critical issues with shareholders.

5. Additional Funding

In many instances, valuation has helped many businesses to acquire additional working capital for their company. A glimpse at the actual value of your business will spell the difference between an investor’s ‘yes’ or ‘no’. 

Doing a proper valuation is important for your company in many ways. Admittedly though, knowing the accurate net worth of your company involves a long and tedious process. The good news is you can always seek help from experts to get your valuation requirements out of the way. 

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D&V Philippines has made it a priority to stay on top of all the developments in the finance and accounting industry. With our readiness to adapt to any changes in the field, we are equipped with the necessary tools to help companies achieve success. Contact us today and we’ll help you find the right solution for your needs.  

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