VALUE Vs VALUATION
Is business company a mercenary commercial organization out to extract its pound of flesh and beyond even to anyone or everyone’s peril? This is what is the perception and image which seems to have become the order of the day. If something of this nature we find happening in the environment near us, we take as the done thing and move ahead. The other part of the understanding is that it does not impact me because I cannot visibly see the connects. What promoters have done to the clean accounting and auditing procedures, is all too well and has been at the centre of any number of discussions for cleaning up.
The values of business have two connotations, first being the values on which the company runs, eats, drinks and breathes. This is its oxygen. It cannot survive for long without it. The organizational culture is what we talking about. The business model is overlaid on it and not the other way round. The second connotation is commercial, is what is the company’s intrinsic value. The real business worth of the company. For the uninitiated the commercial value of the company is its valuation, net worth, market capitalization and various other terms to make it simpler or complex, depending on the way you look at it.
The commercial value of the company depending on strict well laid conventional parameters could give real value of the company on a strong footing. It talks of organic growth, consolidation and moving forward, developing capabilities to beat the laws of nature or the concepts of time and space. The intention of the promoters plays a key role, whether the thought process if of creating an enduring business entity, or create anything which delivers at least temporarily and you are ready to take the risk of any crisis that may come by. At the juncture of a smooth sail, all these look as unnecessary business doomsday stories.
That valuation rules the roost in today’s world is no brain teaser. Whether you are happy with a run of the mill fair valuation or dedicate yourself to the trade of creating fanciful valuation, supported by a whole bunch of fiancé professionals is a call you need to take. These are not financial gimmicks, or some simple tax evasion, it hits at the core of business itself, with or without integrity and trust is the differentiator. From shell companies to criminally playing with the stock markets are all a part of the tool kit. We have heard of Panama, Paradise and Pandora Papers, and also to Harshad Mehta, Ketan Parekh and current Adani imbroglio. The valuation of the startups are no secrets. In the newer games we have FTX scam, with complete valuation wiped out at the drop of a hat. Have fake / manipulated valuations become an economic reality?
OLD DOESN’T CHAGETH FOR THE NEW, ONLY THE MODALITES CHANGE.