Stock Valuation Services

Overview

Methods

Corporate valuation is required in a wide range of business situations, including M&A (mergers and acquisitions), business succession, share issuances, treasury share transactions, and stock option grants. In these critical circumstances, conducting a fair, objective, and reliable valuation is essential to prevent future disputes and to support sound management decision-making.

Our firm conducts thorough interviews to fully understand the purpose of the valuation, the company’s specific circumstances, and industry characteristics, and then selects the most appropriate valuation methodologies.

From among various valuation approaches—such as the Discounted Cash Flow (DCF) method, comparable company analysis, and the net asset value method—we apply the most reasonable and appropriate methods, either individually or in combination, to deliver valuations with a high level of transparency.

In addition to presenting valuation results, we provide detailed explanations of the underlying assumptions, valuation processes, and calculation bases, supporting management and relevant stakeholders in making informed decisions with confidence.

Depending on the purpose of the valuation and the characteristics of the subject company, we select and combine the most appropriate approaches from the following.

Income Approach

This approach determines business value based on expected future earnings or cash flows, adds non-operating assets, and deducts debt value to derive equity value.

It is particularly suitable for venture companies and startups with strong growth potential, where future profitability and business scalability should be emphasized.

・Discounted Cash Flow (DCF) Method
・Capitalization of Earnings Method
・Dividend Discount Method

Cost Approach

The cost approach focuses on the company’s net asset value as shown on the balance sheet, adjusted to fair market value. It is commonly used in small and medium-sized enterprises (SME) M&A and business succession cases, offering a high degree of objectivity.

・Book Value Net Asset Method
・Adjusted Net Asset Method (Fair Value Net Assets)
・Liquidation Value Method

Market Approach

This approach estimates equity value by comparison with publicly traded companies in the same industry or with similar transaction precedents. Market prices generally reflect the company’s going-concern value, including future growth expectations.

・Market Price Average Method
・Comparable Company Analysis
・Comparable Transaction Analysis

In addition, equity valuation is not merely a process of calculating figures,
but also plays an important role as supporting documentation to
fulfill accountability and explanation requirements to counterparties as third parties.

Our firm prepares persuasive and well-structured valuation reports that
enable sufficient explanation to tax authorities, financial institutions,
shareholders, and business partners.

We are committed to providing prompt responses and attentive follow-up,
and we strive to meet the diverse needs of our clients.

STEP01

Initial Hearing

We conduct an initial consultation to understand the purpose of the valuation (e.g., M&A, capital increase, business succession) and the desired schedule.

STEP02

Request for Documents

We provide a list of documents required to perform the valuation.

STEP03

Review of Materials and Follow-up

We review the submitted materials and, if necessary, request additional information or conduct follow-up interviews.

STEP04

Valuation and Report Delivery

Based on our analysis, we select the most appropriate valuation methods and deliver a comprehensive Equity Valuation Report.

Estimated Timeline

In general, the Equity Valuation Report is delivered within approximately two to three weeks after receipt of the required materials and completion of interviews.
Please note that the timeline may vary depending on the valuation methodology and availability of information. Expedited schedules may be accommodated upon request.

Required Documents for Valuation

For equity valuation purposes, we kindly ask you to prepare the following documents and materials.

Company profile and brochures
Commercial registry (corporate registration certificate)
Shareholder register
Financial statements for the past three fiscal years (including detailed schedules and tax returns)
Fair value information for major assets (e.g., real estate, marketable securities)
Business plan
Names of comparable publicly listed companies
Information on interest rates and terms of interest-bearing debt

Additional documents may be requested depending on the specific circumstances.

Contact Us

We offer free initial consultations and preliminary assessments.
A Certified Public Accountant will personally conduct the consultation and
propose the most suitable valuation approach for your company.

For inquiries or consultations, please contact us via the Inquiry Form.

03-3484-0878

In transactions between family members or related parties, it can be difficult to determine a fair price that can be reasonably explained to tax authorities or shareholders.

When companies calculate their own share value, the result may differ significantly from the valuation they initially expected.

In addition, venture companies raising capital or issuing stock options often need a valuation that is logical and convincing to investors and stakeholders.

How should we select the appropriate valuation method (such as DCF or comparable company analysis)?

The appropriate method depends on the purpose of the transaction and the company’s stage of growth.
We discuss the situation with you and select the most appropriate and objective valuation method that can be clearly explained to tax authorities and shareholders.

I am concerned that the valuation might be rejected in a tax audit.

We prepare valuation reports with clear logical support based on past court cases and tax authority guidelines.
Our reports are designed to withstand potential tax authority reviews.

Is valuation possible even if the company is loss-making or has negative net assets?

Yes, it is possible.
We conduct valuations that reflect the actual situation of the company, using methods such as asset-based methods or approaches that incorporate future turnaround plans.

Can you provide a simplified valuation for share transfers between family members?

Yes.
We can calculate an appropriate transfer price that helps minimize the risk of gift tax or capital gains tax issues.

What documents should we prepare for the valuation?

Typically, the following documents are required:

・Financial statements for the past three fiscal years
・Tax returns
・Business plans

Even if these materials are not yet fully prepared, we can first discuss your current situation and help organize the necessary information.

Can you also support the explanation of WACC assumptions in DCF analysis and the justification of discounts for lack of marketability to auditors or tax authorities?

Yes. We do more than simply provide calculation results. We prepare detailed supporting materials that explain the basis for the valuation, including:

・the rationale for selecting comparable companies
・the beta values used in the analysis
・the appropriateness of size premiums and other adjustments

These materials are designed to support explanations to stakeholders, and we can also provide advice on responding to auditors or tax authorities when necessary.

Can you issue a fairness opinion?

Yes, we can.
As an independent third-party evaluation, we provide fairness opinions to support the legitimacy of board decisions and help ensure fairness while mitigating potential conflicts of interest.

1.Initial Consultation / Inquiry

Please feel free to contact us via our inquiry form or by phone. A Certified Public Accountant will personally review your inquiry and respond promptly.
At this early stage, it is not necessary for the scope of work to be fully defined. We will first listen to the issues you are currently facing and the outline of your project, and help clarify how our firm may be able to support you.
All inquiries are handled in strict confidence in accordance with professional ethics, so you may proceed with complete peace of mind.

2.Meeting / Interview

To gain a deeper understanding of your company’s current situation and challenges, we will conduct a detailed discussion either in person or online.
In projects requiring a high level of expertise, it is essential not only to address visible issues but also to identify potential risks. While carefully confirming the scope of work, expected schedule, and your internal structure and policies, we will work with you to design the most appropriate support framework to strengthen your financial strategy.
Supporting documents may be requested where necessary.

3.Proposal / Fee Estimate

Based on the scope confirmed during the discussion, we will provide a detailed proposal clearly stating the professional fees and the basis for their calculation.
As an independent firm, we maintain a flexible and responsive fee structure while ensuring high-quality service. To avoid ambiguity or unexpected additional costs that may affect project budget management, we clearly explain the relationship between the services provided and the associated fees.
If necessary, the scope of work can be adjusted or implemented in phases to better align with your budget and needs.

4.Confirmation of Terms

Once the proposal is agreed upon, we will finalize the specific conditions for the engagement. This includes confirming details such as the frequency of reporting, timing of regular meetings, communication methods, and procedures for exchanging necessary documents.
Our goal is to ensure that you can entrust the engagement to us with confidence from commencement through completion. By establishing a structure that minimizes the burden on your team while allowing you to track progress accurately and in a timely manner, we build a cooperative framework based on clearly defined roles and responsibilities.

5.Contract Execution

After all terms have been finalized, we will formally execute the engagement agreement. The contract is prepared to appropriately manage legal risks while remaining fair and clear for our clients.
Upon execution, our support will formally begin under the legal and professional responsibilities of a Certified Public Accountant. We ensure a prompt and appropriate contracting process that can also withstand explanations required by audit firms or other stakeholders.

6.Commencement of Services

Following the execution of the agreement, we will promptly begin our work. In accordance with the agreed schedule, we will proceed carefully with research, analysis, and preparation of necessary documentation.
Throughout the engagement, we do more than simply perform assigned tasks. As professionals, we provide advice when appropriate and work alongside you as a partner to enhance the quality of management decisions.
Our commitment extends beyond delivering formal outputs. While maintaining professional independence, we aim to provide value that directly contributes to your company’s growth and the sustainable enhancement of corporate value.

Contact Us

For inquiries or consultations, please contact us via the Inquiry Form.

03-3484-0878

Stock Valuation Services

Stock Valuation Services
Overview