Company Valuation

Overview

Rota Capital company valuations are prepared in accordance with the International Valuation Standards Council (IVSC) valuation standards. Two different valuation approaches are often used together or alone, taking into account the activities, market, financial structure and country of the valued company.

 

Rota Capital prepares company valuations based on both TPL based financial statements and financial statements in accordance with TAS standards and TFRS.

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    first approach

    Market Approach

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    second approach

    Income Approach

process

Market Approach

It refers to an approach in which the indicative value is determined by comparing the EBITDA (earnings before interest, tax, depreciation, amortization, depreciation and amortization), revenue, earnings and book value performances of the valued company in whole or in part - taking into account the company structure - with other companies that are substantially similar.

Rota Capital applies the 'Guideline Precedents in the Stock Exchange' method in its market approach. In this method, which deals with publicly traded companies, the quality and diversity of peers, valuation criteria and the availability, availability and certainty of comparable evidence as of the valuation date make this method mostly preferred and accepted.

It refers to an approach in which the indicative value is determined by comparing the EBITDA (earnings before interest, tax, depreciation, amortization, depreciation and amortization), revenue, earnings and book value performances of the valued company with other significantly similar companies. While these valuation methods are mostly applied to industrial companies, different performances are taken into account for different sectors such as installed capacity for energy companies, net asset value for real estate investment trusts and discounted dividends.

Rota Capital applies the 'Guideline Precedents in the Stock Exchange' method in its market approach. In this method, which deals with publicly traded companies, the quality and diversity of peers, valuation criteria and the availability, availability and certainty of comparable evidence as of the valuation date make this method mostly preferred and accepted.

Income Approach

This approach is used for companies with a high ability to generate income. It is seldom used alone in valuation, more often in conjunction with the market approach.

Discounted Cash Flow (DCF), which is based on discounting future cash flows to present value, is based on 'Forward Looking Financial Information (cash inflow/outflow projections)'. In this method, Rota Capital often uses the cash flows of the entire asset, acts on an after-tax basis and takes into account inflation and risk-related assumptions.

The 'Weighted Average Cost of Capital (WACC)' method is used to calculate the discount rate, which is another important element of INA that is applied to reflect the time value of money as well as the type of cash flows and risks associated with the future operations of the company.
 
These methods have been chosen to ensure that the INA value, which is based on forecasts and can therefore often be questioned, is more reasonable and acceptable.
 
EBITDA

EBITDA Value and Analysis

EBITDA (EBITDA) refers to the profit arising solely from earnings generated from core activities, net of financial expenses, eliminating different accounting and taxation policies in different countries and depreciation methods.

EBITDA is the most important financial indicator accepted in international markets and is used in financial statement analysis, credit analysis and company valuation for comparing similar sector companies. 'Company Valuation' includes detailed EBITDA analysis.

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