Valuation

The answer to what valuation is is in the translation of the term in English, which means company valuation. The process aims to establish how much a company is worth in the market, setting a price for it. This value is used in the purchase and sale of shares on the stock exchange, but methodologies for the private market can also be used.

Valuation is a term that, in short, works with the perceptions that investors have about the organization in the market and is related to the possible scenarios that this business may occupy in the future.
The method is basically a forecast of the return on investment in stocks. For a shareholder to buy or invest in shares, he must be minimally sure about the profit he can make over time. That's what valuation is all about.
Every company can be evaluated with the most diverse objectives:
•   sell a share to a partner;
•   perform accounting operations;
•   verify the results of a transaction, merger or acquisition;
•   realize the impacts of lawsuits, among others.
Therefore, more important than knowing what valuation is, is knowing its benefits for an organization.
Using this tool to analyze your business has several benefits, such as:
•   identify the characteristics that value the enterprise and the brand;
•   understand what can make the company worth less, working to correct these aspects;
•   know the real value of the business and how much is worth investing in its growth;
•   have a reliable estimate of your future growth, based on your track record;
•   negotiate a possible partnership more fairly.