This lack of knowledge about your most important asset results in wasted time, money and resources. Assists in understanding how your company value is measured by the financial community and then helps to focus your efforts on increasing this value. Equally as important, management knows where to de-emphasize efforts that are not increasing value. Reduces the chance of incorrect shareholder expectations. When shareholders want to sell, the price of their stock is heatedly debated.
Disputes can distract management and shareholders and generate lawsuits.
By periodically valuing your company, the issues surface before a crisis develops. Improves capitalization of company. By knowing the value of your company, you are better prepared to sell your company to bankers, investors and suppliers. Attracts additional sources of capital. It is important to understand how value is built and how your company' s intangible value can attract new capital such as mezzanine lenders and institutional equity sources.