Many entrepreneurs don’t know the real value of their company, and they deal with it only when they are forced to do so (in case of a merger or acquisition or funding), but even then they tend to try empirical methods!
But knowledge is power. Thus, knowing the net value of a company and the factors shaping it, is an important tool and an indication of where the company is and especially how it can be improved.
It is necessary a study to be drawn up on the Valuation of a company; but why is that necessary?
An overvaluation can lead to excessive optimism about the strengths of the company (even when the market is not doing so well) and any sale or funding efforts of the company will probably be without any effect, as investors are not willing to pay an amount that does not correspond to the actual value.
Similarly, the depreciation of the value of a company can lead to wrong actions and false assessment of the actions carried out so far, not to mention the case of the sale of the company at a lower than the actual price...
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