The Comparable Values (CV) method has two versions: Market Multiples, which seek to estimate the value of the company by comparing it with the value of other entities in the same sector that are listed on organized markets; and Comparable Transaction Multiples, which studies the price paid in previous transactions by companies that are within the same activity as target company, and which serves as a reference for what could be paid for it, normally applied to unlisted companies.
For each sector and activity, the valuation method must be identified better fits according characteristics. Each method does not reward the same attributes of each company equally.
The purchase value is not based on what was done in the past or on projections of what will be purchased in the future. If you go to market with these value approaches based on future expectations, you will simply make a fool of yourself.
Although it is not possible to mention all the factors that ultimately influence the valuation of a company, what is clear that final point is marked by the moment in which the seller’s expectations coincide with those of the buyer, and vice versa.
