VALUATION AND DEVELOPMENT

OF FINANCIAL MODELS

Valuation is one of our key competences. Valuation is an essential element in acquiring businesses or reorganizing groups or companies. A financial model is an essential element in analyzing the viability of new investment or raising finance.

  • Valuation is essential for enterprises with regard to:

    • Buying or selling another entity;

    • Reorganization within a group for the purpose of entering into transactions at market value;

    • Transfer pricing documentation;

    • Disclosure of certain assets and liabilities at fair value according to the IFRS.

  • Financial models are used by our customers in order to:

    • Assess the return rates on planned investment;

    • Raise finance;

    • Obtain a reliable tool for flexible budgeting and activity planning.

Ground Frost specializes in financial modeling and valuation. Since our foundation, we have valued hundreds of entities, IT systems, brands or financial instruments. Our valuations comply with the definition of fair value of IFRS 13 and rely on the maximum amount of market data available in the process.

What we value:

  • Enterprises;

  • Organized parts of enterprises;

  • Intangible assets;

  • IT systems;

  • Financial instruments;

  • Loans;

  • Share-based payments.

Input data:

  • We rely on market data wherever possible;

  • We use terminals and services offering access to up-to-date market data necessary for valuation purposes;

Valuation methods – each our valuation is handled with several selected methods in order to ensure maximum objectivity of the result. What we use:

  • Cost-based methods (mostly in valuation of start-ups, IT systems and certain intangible assets);

  • The adjusted net asset method (for enterprises based on limited significant assets, such as real estate);

  • The market-based method (for enterprises and certain financial instruments);

  • The income-based method (for certain intangible assets, certain financial instruments and enterprises), implemented through the following models:

    • NPV – net present value;

    • APV – adjusted present value;

    • Real options.

Our financial models include:

  • Return on investment projects;

  • Transaction models of the enterprise’s activities before the acquisition;

  • IAS 36 impairment testing;

  • Modeling an enterprise as a whole in order to:

    • Develop rational financial forecasts;

    • Introduce an efficient flexible budgeting system.

Our financial models are:

  • Parametrized, i.e. easily adjustable;

  • Accessible to the customer in an Excel file;

  • Transparent and auditable.

We support our customers in pre-valuation stages both with regard to financial reporting and decision-making in business matters, e.g. in acquisitions or demergers.

Our valuations are always fully documented and present all underlying assumptions. We always request our CUSTOMERS to confirm our assumptions.

For valuation purposes, we maintain and use real-time access to the world’s financial information services in order to ensure that our customers’ valuation is based on latest market data, on a par with what is provided by our much more expensive competitors.

We are also often requested to assess valuations conducted by other providers, in order to present arguments in the event of a dispute over the valuation results.

Experience:

  • Valuation of apartments in a condominium;

  • Valuation of a medical company in the context of its sale and tax restructuring;

  • A financial model developed for a financial institution as a contribution to the business plan for its planned activities;

  • Valuation prepared for a company’s intangible asset in the form of software for sale;

  • Valuation of a company for its shareholders in the context of tax restructuring at the group level;

  • IFRS impairment testing preceding the audit of a company’s financial statements;

  • Valuations prepared for companies holding real estate for sale in the context of mutual settlements among the owners and tax restructuring;

  • Purchase price allocation in the context of a takeover;

  • Valuation of loan portfolios at fair value for transaction purposes;

  • A financial model of a foreign enterprise’s operation in the same branch of the economy for the purpose of valuation before a potential takeover [project 1];

  • A financial model of a foreign enterprise’s operation in the same branch of the economy for the purpose of valuation before a potential takeover [project 2];

  • A business plan and financial model for a new area of activity (start-up) for the purpose of the project’s viability assessment;

  • A financial model developed for a wind farm operation for valuation purposes;

  • A financial model developed for a pharmacy chain in order to verify the viability of the investment;

  • A financial model developed for an IT company’s activity for valuation purposes in the context of a discussion among the shareholders;

  • A financial model developed for an industrial laundry operation as a business plan component for the restructuring plan;

  • A financial model developed for the purpose of valuation of a power plant construction project;

  • A financial model developed for the purpose of valuation of a lease company to be acquired;

  • A business plan and financial model for a new business area to be acquired;

  • A business plan developed for an operation in the field of food retail and FMCG;

  • Review of an in-house business plan and financial model for the operation of a significant infrastructural investment.

  • A financial model and a business plan developed for a chain of afternoon schools for children to facilitate the owners’ decision-making about its further development;

  • A financial model, business plan and valuation for a pharmacy chain construction project;

  • Pre-sale valuation of a subsidiary’s shares;

  • Valuation of a subsidiary’s shares in the context of pricing before redemption of the shares;

  • Brand valuation for tax purposes;

  • Valuation of an enterprise – an FMCG retail chain – for transformation purposes.