Equity & Stock

Wepeak accurately determines the value of equity and stock. The studies are accepted by Egyptian Exchange (EGX), Egyptian Financial Supervisory Authority (EFSA) and other Authorities.

Wepeak™ prepares valuation studies according to Egyptian & International Financial Reporting Standards.The Valuation is based on revised financial models to achieve the accurate value with the least deviation.

The core of every business is its ownership. The equity in a firm could belong to one person or be sliced into millions of segments, or shares. Accurately reporting the fair value of that interest, through an independent equity or stock valuation, is required for merger & acquisition, capital raising, liquidation or general business planning purposes.

Wepeakunderstands these requirements and completes appraisal reports that meet the stringent standards of accounting regulatory authorities. In some cases, equity or stock valuations may be used to settle a dispute; Wepeak’s methodologies and valuation conclusions are well-documented and defensible in court.

Equity and stock valuations are requested for a variety of reasons. According to the merger & acquisition and capital raising sections of Egyptian capital market law No. 95/1992 and its regulations. The appraisals are prepared by an independent licensed advisor by Egyptian Financial Supervisory Authority (EFSA). The appraisals are subject to Egyptian accounting standards and International Financial Reports Standards. The companies must report the fair value of stock and similar instruments on financial statements. Financial reporting guidelines may also require a net asset valuation of stocks to meet the mark to market requirements. And equity or stock valuations can be used as support for a variety of legal matters including estate settlement, minority shareholder dispute resolution, liquidation and bankruptcy. In all of these situations, Wepeakcan help.

Before beginning the analysis,
Wepeakseeks to understand what is motivating the valuation of stocks and whether it will be an equity, preferred or common stock valuation. Next, we examine the full capital structure of the company to understand the cash flow waterfall or distribution of capital and the priority of each stakeholder. With that framework, we can then analyze the risk and potential cash flow available to the equity position. Consideration is given to the distribution of ownership so that factors affecting the value of controlling or minority interests can be taken into account. Our professionals then engage in a comprehensive analysis of the three primary approaches to valuation of stocks and equity: income, market and adjusted asset approach.

Equity and Stock Valuation Methodologies:

  • Income approach to equity and stock valuations
    In the income approach, we estimate the net present value of the company’s anticipated future cash flows and profits.

  • Market approach to equity and stock valuations
    the market approach looks at comparable transactions of similar businesses and guideline public companies, when appropriate. When a match is found, the comparable market value paid for the equity or stock position is extracted from financial statements. Appropriate adjustments are then made for comparability, along with consideration of discounts for lack of marketability or minority interest.

  • Adjusted asset approach to equity and stock valuations
    The adjusted asset approach may be applied, when appropriate. It considers and adjusts the individual asset and liability amounts on the balance sheet to their net realizable value. New companies or companies with impaired cash flow can be examples of circumstances where this approach may be used. With a separate team of certified appraisers experienced in valuing equipment and inventory, assisting our business valuation team in applying this approach, clients can rest assured that, when this approach is applied, it is done so in a defensible manner.

Wepeak’s reports are of the highest quality and include well-supported discounts/premiums for control and marketability, as applicable. Our equity and stock valuations are built on a thorough understanding of the use of the appraisal and a comprehensive view of shareholder rights and the projected financial benefit gained by these positions. This enables us to approach our valuation analysis with a more realistic model of what would happen if the asset had to be sold which provides you with better information.

The appraisal offers:

  • Well-supported and defensible independent opinion of value
  • A narrative of the history and nature of the company
  • A statement describing and explaining the purpose, scope, value definition and asset definition
  • Detailed industry and economic overviews
  • Comparable data points that analyze market conditions
  • A comprehensive analysis of methodology, assumptions and limiting conditions
  • Detailed exhibits that support computations

The minimum requirements:

  • Causes of appraisal
  • Shareholder/partnership agreement (issuing memorandum)
  • Historic, detailed financial information
  • Financial forecasts, budgets
  • An overview of the company’s capital structure
  • A summary of the company’s debt (and priority debt holders)
  • An overview of the company and its operating divisions
  • A brief description of the products and services produced by the company
  • A copy of the current business plan (if available)
  • Copies of past appraisals