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Business valuations

An investment evaluation consists in analyzing and evaluating the feasibility and opportunity of making a specific investment in a capital asset for the company (tangible or intangible) or in any case of starting a specific financing project. Valuation is always useful, whether you are investing with risk capital or operating with debt capital. This process involves careful analysis of the potential costs and benefits of the investment to determine whether the return on investment (ROI) will be beneficial enough for the business.

Valuation aims to identify the net present value of the investment and determine the future cash flows that can be generated from it, in order to estimate its convenience in a given period and show its return in financial terms.

An adequate evaluation is not only aimed at showing the sustainability, convenience and usefulness of an investment for the company (main shareholder), but also at evaluating and highlighting the financial convenience of the operation for the investor (through a demonstration of the actual rate of return of the operation). This practice is very useful especially when operating with debt capital and wanting to show sustainability and financial return to external lenders.

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