Valuation

Company valuation, also known as valuation, is a key component of every M&A transaction. It determines how much a company is worth at the time of acquisition. There are various methods to evaluate a company's worth, including the analysis of revenue, profit, and assets. In the e-commerce sector, growth rates, customer retention, and market trends also play an important role in the valuation process.

Valuation Methods:

• Multiplier Method: The company's value is calculated based on a multiple of its profit or revenue.
• Discounted Cash Flow (DCF): The future cash flow of the company is estimated and discounted to its present value.
• Asset-Based Valuation: The company's value is determined based on its assets, such as real estate, machinery, and inventory.

Example:
An e-commerce shop with annual revenue of 5 million euros is valued using a multiplier of 3, resulting in a company valuation of 15 million euros.