Companyvaluation -a critical appraisal of common methods, criteriaand chal-lengesfor SME ́s

The importance of business valuations and acquisitions is increasing in today's economy, as mergers and acquisitions transactions and joint ventures can complement or diversify a company's strategic direction (Richter and Timmreck, 2004).Therefore, the evaluation of companies is at the centre of topics such as financing, market efficiency, corporate governance and investment opportunities. Valuation is an increasingly important issue as, both mergers and acquisitions and financing decisions require ongoing valuation and consequently capture a key role in modern economic activity (Petitt and Ferris, 2013).Thus, it is not surprising that the difficulties and approaches of the valuation of companies in the literature is widespread. The evaluation of the entire company is one of the most difficult and important disciplines in business administration(Richter and Timmreck, 2004). Already from this short introduction it becomes apparent that the topic valuation has many facets. This thesis focusses on methods for evaluating companies with a specialisation in the SME sector. The different approaches are explained, compared and considered from various perspectives. The objective of the thesis is to give the reader an overview about the practical approaches of the evaluations of small and medium-sized enterprises and to explain the difficulties and challenges of the most important SME industries. The work will therefore not focus exclusively on the different approaches, but will deal with the main SME sectors and their practical implementation and application of business evaluations. The attitudes and opinions of various experts of the most important SME industries are used to highlight how different companies deal with existing economic claims and how they correlate with business valuation.The objective of this thesis is not to formulate generally accepted statements which can be projected on all companies or industries, but rather to gain an insight into the practical implementation in order to carry out further research on this basis