5+ SAMPLE Summary Valuation Report

What Is a Summary Valuation Report?

A summary valuation report provides a value conclusion using a condensed version of the material that would be presented in a complete study. A summary valuation report document lacks the degree of information seen in a full analysis. The valuation analyst is still expected to do substantially the same investigation and analysis that is necessary for a thorough valuation report in this report; however, the parties want to decrease the customary appraisal load of creating a detailed valuation report. When a full valuation report is not necessary, this report is generally a more cost-effective method of business appraisal. You may want to check out the sample valuation report of a company to get a better understanding.

Necessary Business Reports

It’s difficult to manage and expand a company if you don’t have visibility into how it’s operating and where it can improve. That is why business valuation and other types of reports are critical for appraising your company and putting it on the right track. You may see what is and isn’t functioning by studying the information included in various sorts of reports and where you can make changes and modifications. The following items curated in the list below are some of the most popular sorts of reports that business owners find beneficial so it is advisable that you know the difference between them so you can decide which one fits into your business or the situation you are encountering.

Formal Business Reports: Formal reports provide more detail and content than shorter report formats or memos. These reports are created in a certain format and delivered to the authorities in a predetermined manner. They are presented to numerous committees and groups, as well as the leaders of various departments or organizations. Because the report solely discusses business in a formal manner, it is referred to as a formal business report. Other formal reports are divided into two types: statutory reports and non-statutory reports.Annual Report: An annual report‘s principal function is to show you what your organization has done in the previous year. You may also opt to utilize this sort of performance report as a marketing tool to get people enthusiastic about your firm, particularly potential investors and consumers if the financial figures are in your favor. Annual reports to the Securities and Exchange Commission are required by law for publicly listed corporations (SEC). The obligatory annual report’s purpose is to offer public information about a company’s operating and financial activity throughout the previous year. Typically, the report is distributed to shareholders and investors, who use it to assess the business’s financial performance and make investment decisions.Sales and Revenue Report: Revenue is the total money generated by a corporation from its main operations before any expenditures are deducted. The revenues generated by a corporation through selling items or services to its consumers are referred to as sales. A sales and income report are one of the simplest sorts of company reports you can create because it just provides your sales numbers over a specified time period. Above all, you may rapidly compare these figures to your costs to calculate your profit margin. You may also receive a fast overview of how to effectively manage future sales activities, such as finding the optimal time to execute marketing campaigns, by comparing these data to those of other time periods.Inventory Report: Inventory reports show you how much of your goods are on hand at any one time. This report does not have to be sophisticated; in fact, it can be as basic as a checklist. If you want to get a little more involved, you may create an inventory ranking report, which will show you how well your items sell in relation to the overhead cost of maintaining them in stock. Raw materials and components, work in progress, completed items, and maintenance, repair, and operational supplies are the four basic categories of inventory.Marketing Report: Marketing reporting is a systematic procedure that curates, collects, and analyzes marketing data and analytics in order to enhance the performance of the marketing department. Marketing reports are used to demonstrate campaign performance, make better decisions, and accomplish marketing objectives. Marketing is one of the most crucial components of many organizations and taking note of your activities and their outcomes is critical. You may track where your sales are coming from by accumulating and evaluating this data to ensure you’re receiving a decent investment return for your marketing budget.Website Traffic Report or Social Media Report: Analysts and marketers use website traffic to assess the success of a website: the overall number of website visitors, as well as information on where they came from and how they arrived at the site. These sorts of business reports provide insight into your company’s internet performance. You may customize them to your unique needs to obtain information ranging from demographics to involvement levels. Although you can always keep track of your company reports yourself, some business owners find it more convenient to outsource this duty. Another advantage of having an independent third-party run your reports is that it ensures accuracy devoid of subjective influence.

Importance of a Valuation Report

A business valuation study provides a range of data and figures regarding a company’s genuine worth or value in terms of market competition, asset values, and income values to the company’s owner. Every company owner should have this information on hand. To illustrate firm development, a business value should be acquired at least once a year. A business valuation will provide you with an accurate evaluation of your company’s current market value. This is a prerequisite for mergers and acquisitions, as well as an excellent approach to planning for future business succession. This makes it plays a huge role in analyzing the growth and profitability of the business you handle.

Better Grasp of the Company’s Assets: It is impossible to overestimate the significance of receiving the best value report. Estimates are undesirable since they represent a wide generalization. For business owners to acquire proper insurance coverage, estimate how much to reinvest in the company, and determine how much they can sell their business for while still generating a profit, specific statistics must be determined using valuation methodologies.Being Aware of the Company’s Resale Value: This process should start well before the company is placed up for sale on the open market, allowing you to dedicate more time to enhancing the company’s worth and reaching a better selling price. As a business owner, you should understand the worth of your company. Just like owning a property or a vehicle, there are various factors that could affect the resale value. For example, some projects that you have handled or completed may play a role in convincing your potential clients or buyers that your business is still marketable.Define the Value of the Company: Knowing the actual value of your company is frequently a deciding factor in selecting whether or not to sell it. It also helps to demonstrate how a company’s income and worth have increased over the last five years. Prospective purchasers desire to see that a business has expanded gradually and continuously over time. This is in relation to how you are able to see the resale value of your company, but in this matter, you can see how valuable the company is while existing in the industry your business is in.Helps in Unions and Investments: After determining your business valuation, you may negotiate your way to the assessed valuation numbers supplied by a well-known and renowned valuation determination company. If you are offered less than your business is worth, reject the sale or advise going to mediation. It will help both sides come to an agreeable arrangement. Remember, that even though a business may be slow, don’t take the deal out of desperation otherwise you may miss out on better opportunities for your company.Entices Investors: When seeking for new investors to assist fund your company’s growth or save it from bankruptcy, the investor will want to see a comprehensive company valuation study. You should also provide a valuation projection to potential investors depending on the monies they have provided. Investors want to know where their money is going and how they will make a profit. When a potential investor sees that their money will propel the company forward, increase its value, and put more money back into its goods, they are more likely to invest. Even the most skilled appraiser cannot determine an acceptable value in the absence of precise and complete information.

How to Write a Summary Valuation Report

Writing a summary valuation report may not be as lengthy as other business reports that you may have read or encountered while working within the company since it is just a summary of the actual report. But that does not mean you should skip out on the important details regarding valuation. This article not only provides you with samples and templates but you are also shown the summary valuation report format that contains what is comprised within the said document. With that being said, you can now proceed to the guide below to get started on writing a summary valuation report.

1. Recognize the Valuation’s Objective

The report’s intended application and purpose, such as a gift or estate planning document, a buy-sell agreement, financing, or litigation, should be clearly stated. This section is where you will be able to define what the rest of the content will be about. The value standard, such as market price, fair value, strategic interest, or dissolution value, will be defined by the transaction’s aim. The value standard should be presented in straightforward words. You don’t want to include figures of speech in this document as it is meant to be direct and easily understood by whoever will be reading it.

2. Determine the Basis and Premise of Value

A basis of value is a description of the underlying measuring assumptions of a valuation, and for many frequent valuation applications, these criteria specify the right basis. A premise of value, on the other hand, is a form of assumption or assertion about the most likely set of transactional conditions that may be applied to the subject valuation. In common usage, a premise of value is an assumption or assertion upon which research is founded. This is the section where you will be defining the basis and premise of value for the specific property, vehicle, or business venture you are evaluating.

3. Examine the Past Performance

After you have defined the purpose of the valuation report, you will then be writing out the company’s history. This will include what specific ventures you have encountered and how the results have turned out. The information you placed in this section will then showcase the historic performance of your business helping to display or further align the value you see your business to actual details that back up your claim in previous steps.

4. Analyze Financial Value

Past performance might provide valuable insight into future cash flow. A company’s value is impacted by how well it has performed in the past or how well it has performed in contrast to other firms in the same industry. To arrive at a defined amount of cash flows, modifications to the company’s financial statements are sometimes required to account for discretionary or nonrecurring items, as well as distinctive accounting practices. To correctly assess the future, the report should include a forecast of future operations, or at the very least, a discussion of the company’s expectations for the future.

5. Determine the Valuation Approach to Be Used

This part should include a detailed explanation of which methods were employed on the subject firm and how they were used. This section is critical since different approaches or sets of methods may be used in the same scenario on a frequent basis. This section should give detailed information on the computations that led to the appraiser’s findings.

6. Include Discounts on the Conclusion of the Value Report

The appraiser should describe which discounts are justifiable and why they are reasonable throughout this portion of the valuation report. It should give actual data to support the discount rates that have been established. In addition to traditional sources of valuation evidence such as the transaction history and offers, loan applications, preceding appraisal reports, and rules of thumb, comprehensive reports would provide values derived from unconventional sources of valuation evidence, which will be accommodated against the appraiser’s methodology values.

FAQs

What is the purpose of the valuation report?

The goal of valuation is to assess an asset’s or company’s worth and compare it to the current market price. Valuations for assets or liabilities are conducted for a variety of reasons. A valuation can be useful when attempting to determine the fair value of a security, which is ascertained by what a purchaser is willing to pay a seller, assuming both parties enter the transaction willingly. A valuation can be useful when attempting to determine the fair value of protection, which is determined by what a buyer is prepared to pay a seller, assuming both parties enter the transaction willingly.

What is the purpose of an executive summary in a valuation report?

An evaluation report’s executive summary is a condensed version of the complete report. It emphasizes evaluation results and suggestions while also providing a brief explanation of the evaluation goal, main evaluation questions, and research options employed. An executive summary should summarize the report’s main points. It should restate the aim of the study, emphasize the key issues, and include any findings, conclusions, or suggestions. In this case, for a summary valuation report, it may not be necessary to include it as the contents will be succinct and direct to the point.

What are the other types of valuation reports?

There are various forms of valuation reports and in knowing the difference, you can apply each type much better to the situation you are encountering and the kind of content you are writing. The four types of valuation reports include; a comprehensive report, an estimate report, a calculation report, and a limited critique report.

Whether it is an inventory valuation or stock valuation, having the presence of a valuation report is important to collect and gather information about the value of the possession or business you are holding. The contents may differ but the purpose remains in upholding the value they have with them.