Valuation, in plain English.

Values a business by the cash it is expected to generate in the future, converted into a single present-day figure. It is the approach that most directly reflects a business's own economics, which is why it usually carries the most weight for going concerns. The DCF is its best-known method.

Values a business by reference to what buyers and investors have actually paid for similar businesses — either listed comparables or real transactions. Its strength is evidence from the real world; its weakness is that no two businesses are ever perfectly comparable, so the adjustments matter as much as the multiples.

Values a business by what its assets are worth net of its liabilities, each restated to current values. It says little about future earning power, so it is most relevant for asset-heavy companies, holding structures and businesses where the assets are the story.

The workhorse method of the income approach: project the cash flows the business will generate, then discount each year's cash back to today at a rate reflecting its risk. The output is only as good as the assumptions underneath it — which is why a defensible DCF documents every material one. Central to most business valuations.

The blended return that a company's lenders and shareholders together require for the risk they are taking — used as the discount rate in a DCF. A higher WACC means the market demands more return for the risk, which translates to a lower present value for the same cash flows.

The value of everything the business earns beyond the explicit forecast period — typically the largest single component of a DCF. Because it is so large, reviewers scrutinise the growth rate and exit assumptions behind it more than almost anything else in the model.

A market-approach method that applies valuation multiples (such as EV/EBITDA or price-to-earnings) from listed companies in the same business to the subject company's own numbers. Adjustments are then made for differences in size, growth, margins and marketability.

A market-approach method that draws multiples from actual M&A deals involving similar companies, rather than from stock-market prices. Transaction prices often embed a control premium, so they need careful adjustment before being applied to a minority stake.

A method for valuing brands, patents and other intellectual property. It asks: if you didn't own this asset, what royalty would you have to pay to license it? The royalties you are "relieved" from paying, discounted to today, are the asset's value. A standard tool in IP valuation.

Enterprise value is the worth of the whole operating business — what it would cost to own it free of its financing structure. Equity value is what's left for shareholders after debt is repaid and surplus cash is added back. Confusing the two is one of the most common — and most expensive — mistakes in deal negotiations.

The price at which an asset would change hands between market participants in an orderly transaction — the standard used in financial reporting under Ind AS 113 and in several Companies Act contexts. It is measured from the market's perspective, not the owner's. The basis for our fair value measurement work.

The price a willing buyer would pay a willing seller, both informed and neither under compulsion — the standard most often invoked in Indian tax contexts. It is close to fair value but not identical: definitions and prescribed methods vary by statute, so the applicable rule matters.

The definition of "value" a valuation is answering — fair value, fair market value, investment value, and so on. It is fixed by the purpose of the valuation, and two perfectly correct valuations of the same company can differ simply because they answer to different standards. It is the first thing we pin down at scoping.

A reduction applied because shares in a private company cannot be sold quickly or cheaply the way listed shares can. An investor pays less for what they cannot easily exit. The size of the discount depends on facts — transfer restrictions, dividend history, likely exit horizon — not a standard percentage.

A reduction applied when valuing a minority stake, because a minority holder cannot set strategy, appoint management or decide dividends. It is the mirror image of the control premium a buyer pays to acquire a majority. Whether it applies depends on the stake, the shareholder agreement and the standard of value.

The band within which the valuer concludes value reasonably lies, after reconciling the approaches used. A range is more honest than false precision: valuation is an estimate built on judgement, and a well-reasoned range tells you both the number and how much conviction sits behind it. Every report we sign concludes with one.

Shorthand borrowed from the US, where Section 409A requires an independent valuation of common stock before options are granted. In India the analogue is an independent fair valuation supporting ESOP pricing and related tax positions. If a US investor or parent asks for a "409A", this is what they mean. See startup valuation.

The value of employee stock options for accounting and tax — usually built in two layers: first the fair value of the underlying share, then the value of the option on that share using a model such as Black-Scholes. It drives the compensation cost in the company's books and the tax employees face on exercise. Covered under ESOP valuation.

Securities that start life as preference shares, debentures or simple agreements and later convert into equity — the standard currency of Indian startup fundraising. Their valuation must account for conversion terms, liquidation preferences and the rights attached, which is why a converted-equity shortcut often misprices them.

The "angel tax" provision of the Income Tax Act: if a closely held company issues shares above fair market value, the excess can be taxed as the company's income. Rule 11UA prescribes how that fair market value may be determined and who may determine it. A supportable valuation on file is the practical defence when a notice arrives.

RBI rules that set price boundaries when shares move between Indian residents and non-residents — broadly, a foreign investor should not pay less, and a foreign seller should not receive more, than fair value determined by a prescribed valuer. Any cross-border share issue or transfer needs a compliant valuation before the money moves. See FEMA valuation.

A valuer registered with the Insolvency and Bankruptcy Board of India under Section 247 of the Companies Act 2013, after qualifying examinations and membership of a Registered Valuers Organisation. Many statutory valuations — under the Companies Act and in insolvency — are valid only if signed by one. Our reports are.

The globally recognised framework, published by the International Valuation Standards Council, governing how valuations should be scoped, performed and reported. Following IVS — alongside ICAI Valuation Standards — is what makes a report readable and defensible in front of international investors and reviewers, not just local ones.

After an acquisition, accounting standards require the price paid to be split across the identifiable assets acquired — brands, technology, customer relationships, contracts — with the unexplained remainder recorded as goodwill. It fixes the acquirer's post-deal balance sheet and future amortisation, and auditors review it closely. See purchase price allocation.

The smallest group of assets that produces cash inflows largely independent of the rest of the business — a plant, a brand's operations, a business line. Impairment testing is performed at CGU level, so how the units are drawn can decide whether an impairment surfaces or stays hidden.

The write-down required when an asset's carrying amount in the books exceeds what it can recover — through use or through sale. Ind AS 36 requires goodwill and certain intangibles to be tested at least annually, and other assets whenever indicators of trouble appear. Covered under impairment testing.

The present value of the cash flows an asset or CGU is expected to generate for its current owner, on defined Ind AS 36 assumptions. It is compared with fair value less costs of disposal, and the higher of the two — the recoverable amount — is tested against the carrying amount to decide whether an impairment exists.