Business valuation with clear purpose and robust logic.

What this page helps you with

You get a scientifically grounded and practically usable orientation on which type of value is relevant in your case — for example as decision value, argumentation value, or as a settlement value in a neutral mediation process between parties.

Typical situations

Business valuation becomes especially important where economically significant decisions must be prepared, justified, or reviewed.

Business sale and acquisition

In an acquisition, the key issue is typically the maximum acceptable purchase price; in a sale, the minimum acceptable sale price. In functional valuation theory, these are understood as decision values.

Merger and demerger

In mergers and demergers, the decisive quantity is often not a price but a marginal quota or value relation. Valuation must then capture the relation between units, rights, and future benefit appropriately.

Shareholder disputes

In shareholder conflicts, the issue is often not only a number, but a transparent economic basis for argument. Valuation logic, assumptions, and data quality must therefore be especially clear.

Inheritance, gifting, and tax-related contexts

In succession, inheritance, and tax-sensitive matters, documentation depth, purpose-fit methodology, and transparent derivation are especially important.

Review of existing valuation reports

A structured review can show whether method choice, assumptions, data basis, and conclusions are actually robust in the specific assignment.

What you receive

The objective is not only a figure, but a robust economic interpretation of the company.

• Clear definition of valuation purpose, context, and valuation function
• Transparent presentation of key assumptions, value drivers, and risk influences
• Traceable derivation of value instead of black-box output
• Interpretation of uncertainty, ranges, and sensitivities
• Practical presentation for decision, negotiation, mediation, or review

Approach and methods

Methods are tools and answer different questions. For theoretically well-founded valuation, functional business valuation and the original/subjective capitalised earnings method are particularly important. In addition, DCF approaches, multiples, and further perspectives may be used for argumentation and plausibility purposes. The IDW S 1 standard can — depending on valuation context — provide a recognized framework for process, documentation, and interpretation.

• Functional business valuation primarily serves to determine the decision value.
• The subjective capitalised earnings method is closely related to functional valuation theory and can be understood as a simplification of it.
• DCF methods can be useful as argumentation or comparison values, but do not automatically equal the decision value of the concrete valuation subject.
• Price and value are distinguished carefully: an observed market price is not automatically the economically relevant value for you.

What matters most in practice

• The key value is usually the decision value, i.e. the threshold of advantage for the specific party.
• In acquisition, sale, merger, and demerger, the economically relevant target quantities differ: purchase price, sale price, or marginal quota.
• Value and price are not identical. A price emerges in the market or in negotiation, a value from a valuation logic.
• Uncertainty should not be compressed, but disclosed as far as possible.
• The quality of the reasoning is often more important than one single point estimate.

Typical documents

A first meaningful assessment often does not require a fully complete file set. A structured initial documentation base is usually enough to determine sensible scope and next steps.

• Financial statements, management accounts, and current financial information
• Forecasts or management assumptions about future development
• Information on business model, market, competition, opportunities, and risks
• Shareholder agreements, relevant contracts, and structural specifics
• Context, intended use, and relevant timeline

Detailed use cases

The more concrete the context, the more precisely the suitable valuation logic can be defined.

• Business sale and acquisition
• Merger and demerger
• Shareholder disputes
• Tax and inheritance
• Valuation report review

Questions for orientation

Is there one objectively correct business value?

Not in that broad sense. Depending on valuation purpose and valuation function, different value concepts may be relevant, including decision value, arbitration value, and argumentation value.

What is the decision value?

The decision value is the threshold of advantage for the concrete valuation subject. In an acquisition, this is typically the maximum acceptable purchase price; in a sale, the minimum acceptable sale price; and in a merger or demerger often a marginal quota.

What is the difference between arbitration value and argumentation value?

The arbitration value serves a neutral mediation function between parties, while the argumentation value is used to influence the counterparty economically in a negotiation setting.

Why can different methods produce different results?

Because methods rest on different theoretical foundations, perspectives, and assumptions. It is therefore crucial to distinguish whether a method is intended to determine the individual decision value or rather a more objectified or market-oriented comparison value.

Why is uncertainty disclosure so important?

Because valuations depend on assumptions about the future. Ranges, scenarios, and sensitivities help reveal opportunities and risks instead of hiding them behind one seemingly exact number.