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Dissertation
Etude, élaboration et mise en place de méthodes et paramètres dynamiques au sein d'un outil de valorisation de PME belges
Authors: --- --- --- ---
Year: 2019 Publisher: Liège Université de Liège (ULiège)

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Abstract

The subject of business valuation is a very controversial one. Indeed, many practitioners agree that it is not an exact science. It is therefore understandable that the valuation of Belgian small and medium-sized enterprises is even more so. The lack of visibility of the market makes comparisons almost impossible and involves varied and poorly formalized methodologies. In addition, there are many evaluation techniques and can lead to results that are very different from each other. These differences are mainly due to the parameters used in the implementation of methods.

This project-thesis will therefore be divided into two main parts. The first one will present in a theoretical way the different valuation techniques of the host company. It will provide the necessary information to the reader so that he or she can have the knowledge necessary for a proper understanding of the project. The second part will discuss the analyses carried out on the company's operational tool as well as the research carried out on the market, with professionals in the field. The results obtained will then be presented and will lead to modifications and improvements to the Excel tool, which will also be developed in this part of the work.

This paper will therefore address some of the parameters used when implementing techniques, such as Small Firm Premium or the amount of equity capital used. It will also make it possible to analyze the relevance of the methods implemented and the accuracy of new techniques. Finally, advice and suggestions will be given to the company in order to enable it to better defend its files and obtain valuation results closer to the prices the market accepts to pay.


Dissertation
DCF model and the additional risk to consider in SME valuation. Theoretical models and studies versus practicians' view.
Authors: --- --- ---
Year: 2021 Publisher: Liège Université de Liège (ULiège)

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Abstract

Company valuation is at the center of many crucial steps in the life of an SME. Whereas works on company valuation are plentiful, those focused on SME valuation are much scarcer. This master's thesis firstly aims to provide a summary of the works that have been realized on the adaptation of the discount rate when valuing a company through the Discounted Cash Flow (DCF) model. Another objective of the paper is to determine if the theory put forward through these works finds its counterpart in the practicians' day-to-day when valuing SMEs in Belgium. Through the realization of interviews with eight business valuation experts, answers to this question were provided. Though used by most of the respondents, the DCF model is not perfect and is not suitable for every type of company. When suitable, however, adaptations to the expected rate of return are often necessary to take into account the fact that the company is an SME and therefore has riskier characteristics than large or quoted companies. Such risks include management dependency as well as illiquidity. The adaptations made to the model often consist in adding a small firm premium (SFP) to the base rate. Though studies on the topic exist and propose either referencials or ways to compute this SFP, there is a clear tendency from Belgian professional to draw this premium from their own experience, rather than theoretical works.

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