Valuation conclusions

The simultaneous use of several different valuation methods is often desirable and conditioned by the nature of the subject of the valuation and the investor's decision-making process or required by law and standards. As a result of using various methods, including those using different approaches (market, income, cost), a numerical range is usually obtained that contains the value sought. If the valuation were prepared for transactional purposes, negotiation arguments would be generated, allowing the value to be assessed from various, often extreme, points of view. Ranking valuation methods according to a subjectively established criterion of their relative importance and determining a single valuation result by calculating a weighted average value from the results obtained using different methods reduces the credibility of the valuation process and creates the impression of manipulation of the valuation result.

However, suppose several valuation methods were used, and substantive argumentation was provided, justifying which of these methods is more likely to approximate the value of the valuation subject. In that case, it may be recommended to limit the obtained value range, using percentile measures of the probability density distribution of the valuation result concerning the risk management policy or practice used in the context of the valuation purpose, or you can indicate one amount from the range (median / expected value).

Formulating a decision recommendation requires a careful and objective approach. The valuation result should be inextricably considered in the context of the information conditions of the valuation process and the financial models and analytical techniques used. When using simulation analysis based on models with random variables, the valuation result can be weighted by adopting weights inversely proportional to the variability of the distributions of individual results obtained using different methods. In this way, the process in which the assumptions were formulated with a lower level of uncertainty will significantly impact the valuation result.