private-equity-valuation

Vocabulary Word

Definition

'Private equity valuation' is about determining the value or worth of a company that is privately owned. It's a financial exercise, often done by experts, but essentially it's much like having a house appraised before you sell.

Examples in Different Contexts

In financial analysis, 'private equity valuation' is the process of determining the current value of a private company's equity interests. A financial analyst might explain, 'Private equity valuation involves complex methodologies, including discounted cash flow analysis and comparables, to estimate the worth of a company not listed on public exchanges.'

Practice Scenarios

Tax

Scenario:

The new tax regulations require closure scrutiny of private companies. The government wants to ensure correct tax collection.

Response:

We need to be diligent in our private equity valuation to ensure a correct tax calculation.

Finance

Scenario:

We found a promising medical technology startup seeking seed funding. Their patented technology seems game-changer.

Response:

I agree. Let's conduct a private equity valuation to determine right investment amount.