Few SME leaders know how much their company is worth.
Yet, with the new capital gains tax as provided for in the draft bill, valuation is becoming critically important today in order to position oneself correctly in light of this new tax.
Why valuation is becoming essential now
From 1 January 2026, any capital gain on the sale of shares will be taxed.
A transitional regime provides that, for shares already held, the taxable capital gain will be calculated based on the estimated value as of 31 December 2025, and not on the historical acquisition price.
Capital gains accrued before 2025 will not be taxed. Only the gain realised above the market value as of 31/12/2025 will be subject to taxation.
For listed companies, the value retained will be the last closing price on 31/12/2025, unless you can prove that your acquisition price was higher. This exception remains valid until 31/12/2030.
For unlisted companies (private limited companies, public limited companies, holding companies, family-owned businesses, etc.), everything depends on your ability to document a serious and defensible valuation. For these companies, having a robust valuation is therefore essential to substantiate this reference value.
Valuing a company: a snapshot or a movie?
All valuation methods are based on the same underlying logic: comparing what the company is worth today (balance sheet) with what it can generate tomorrow (P&L / cash flows).
Some methods favour a balance-sheet-based approach (asset value), others a profitability or return-based approach (income statement), while some adopt a hybrid approach, focusing on both assets and earnings.
A serious valuation never consists of choosing a single method, but rather of comparing several “angles of view”, and discarding those that are not relevant for the type of business concerned.
The main families of valuation methods
1. Asset-based methods
They value what the company owns today.
a) Adjusted Net Asset Value
The simplest method:
Adjusted Net Asset Value = Assets − Liabilities
Assets include all components such as cash, inventory, buildings, patents, receivables. From this, we deduct the company’s liabilities: bank debt, salaries, suppliers, taxes, etc.
📌 Strengths
- Very suitable for asset-heavy businesses, real estate companies, holding companies
- Provides a concrete picture based on tangible figures
📌 Limitations
- Says nothing about future profitability
- Not suitable for companies that create value through intangible assets (consulting firms, agencies, service companies, unique know-how, etc.)
- The approach can be reductive, as two companies may show the same net asset value while having entirely different business models.
2. Mixed methods
They combine assets and profitability.
a) Average value method
The value is calculated as the average of:
- Asset-based value
- Earnings or cash-flow-based value
Philosophy: a company is both an asset base and a profit-generating machine.
📌 Strengths
More balanced than a purely balance-sheet-based approach
📌 Limitations
- Loss of relevant information specific to each method
- The intrinsic value may not reflect the company’s true economic reality
b) Schulenburg method
This method is widely used in German-speaking countries.
It focuses on a company’s ability to generate excess profits, meaning profits above what would normally be expected for a company of similar size and sector.
This excess profit is added to the net asset value, thereby valuing over-performance as well.
📌 Strengths
- Ideal for stable, family-owned SMEs with a consistent track record
- Suitable when comparable companies exist in the market
- Incorporates the notion of goodwill beyond pure assets
c) UEEC method
A modernised and harmonised version of the Schulenburg method, validated by the Union of European Accounting Experts. It uses standardised coefficients better suited to current markets.
📌 Strengths
- Allows valuation as a going concern, independently of historical asset value
- Often used for ownership transfers, partial sales or internal assessments
- Particularly relevant for SMEs or stable companies with consistent earnings
d) Stuttgart method
This method is similar to the average value approach, but introduces a weighting factor α (between 0 and 1) to tilt the valuation:
- more towards assets, or
- more towards earnings,
depending on the nature of the business.
📌 Strengths
- Flexible and widely used
- Accurately reflects economic reality
3. Earnings / P&L-based methods
a) EBITDA multiples
Probably the best-known method.
Value = EBITDA × sector multiple
The multiple depends on:
- The company itself
- Market conditions
- The sector
- Growth prospects
- Risks (client concentration, dependencies, working capital, etc.)
- Management quality
📌 Strengths
- Simple, intuitive, widely used in M&A
- Reflects operational performance well
📌 Limitations
- Does not take assets into account (real estate companies may be undervalued)
- Volatile: one poor financial year can significantly reduce the valuation
b) Anglo-Saxon goodwill method
This method calculates sustainable excess earnings compared to the market and capitalises them over several years.
📌 Strengths
Highly relevant for companies with:
- Strong brands
- Established reputations
- Deep expertise
- A durable competitive advantage
📌 Limitations
- Only relevant for sellers if excess profits exist
- Assumes excess profits will continue
- Requires reliable comparables
c) Pure earnings method
Sustainable earnings are capitalised using a required rate of return.
📌 Strengths
- Simple
- Widely used for highly profitable and stable companies
📌 Limitations
- Completely ignores asset value, creating a significant bias for certain sectors
d) DCF – Discounted Cash Flow
Future cash flows are projected over a given period and discounted to obtain a present value.
📌 Strengths
- Incorporates the company’s future outlook
- Very suitable for predictable, mature companies with a strong track record
📌 Limitations
- Extremely sensitive to assumptions (growth, inflation, investments, etc.)
- Not suitable for young, fast-growing SMEs or companies without historical data
- Ignores asset value. Typical example: A freelancer with recurring contracts may have a high DCF value. A real estate company owning a building with a few tenants may have a low DCF value.
4. Non-accounting factors
A valuation must also take into account elements not reflected in the numbers:
- Dependence on a single client or supplier
- Non-replaceable management skills
- Future costs required (recruitment, machinery, maintenance)
- Understated management remuneration prior to sale
- Operational risks (breakdowns, regulatory standards, certifications)
- Ageing machinery or equipment
All of these factors can significantly alter the final valuation.
What is the right valuation method?
No method is perfect. Each represents a specific perspective on a company’s value and offers only a partial view.
In practice:
Some methods will clearly be inconsistent (e.g. a DCF 40× higher than others)
Some will be unsuitable for the company’s stage of development
Others will provide a useful angle for negotiation
A sound valuation typically uses 4 to 6 methods, leading to a meaningful average value.
Finally, some companies cannot be valued using these methods. For example, a biotechnology company in the R&D phase (“cash-burn”) requires valuation of its patents or development pipeline, rather than the company itself.
When is a valuation useful?
Beyond the tax framework of the future capital gains tax, valuation is above all a strategic tool.
Preparing a sale
If you plan to sell your business, knowing the price you aim to ask for is essential before entering negotiations. A valuation provides this financial benchmark and helps identify levers to increase value: EBITDA optimisation, improved working capital management, and clarification of potential friction points during the sale process. It allows you to enter negotiations with a clear, substantiated and strategic vision.
Planning an acquisition
If you are considering acquiring a company, valuation is just as essential. It helps assess whether the asking price is coherent, anticipate risks, identify negotiation levers and determine the maximum price you can pay without jeopardising your project. A solid valuation becomes a key tool to structure your offer, secure the transaction and negotiate from a position of strength.
Preparing a family succession
In an often emotional context, valuation provides an objective reference point that helps limit tensions. It clarifies the company’s true value, avoids subjective debates and supports fair decision-making based on a neutral and shared financial assessment.
Welcoming new investors
A structured valuation strengthens the credibility of your investment case. It clearly explains the logic behind the funding sought, demonstrates business robustness and supports assumptions with coherent data. It is a key element in building investor confidence and facilitating commitment.
How Altesia can support you
At Altesia, we regularly perform valuations for SMEs, tailored to your activity and specific context.
Our approach:
- Review of accounting data
- Selection of relevant valuation methods
- Elimination of inconsistent methods
- Where appropriate, integration of non-accounting factors following analysis of the business and figures
- Establishment of a reliable average value
- Identification of key sensitivities and risk factors affecting valuation
Interested in discussing the value of your company?
Contact us for a clear, well-argued and business-specific valuation.
