Factory Valuation
Factory Valuation involves determining the monetary worth of a manufacturing facility, including its land, buildings, machinery, equipment, inventory, and other assets.
Purpose of Factory Valuation:
- Insurance coverage and claims.
- Sale or purchase negotiations.
- Asset management and reporting.
- Financial analysis and reporting.
Benefits Of Inspection
Determines accurate market value of factory assets, machinery, and infrastructure.
Supports insurance, taxation, and financial reporting with verified valuations.
Helps identify underinsured or overvalued assets to reduce financial exposure
Assists in mergers, acquisitions, and funding decisions with factual data.
Builds trust through independent, certified valuation reports.
Key Components of Factory Valuation
- Land and Buildings:
- Market value based on location, size, and condition.
- Structural assessments for depreciation or obsolescence.
- Plant and Machinery:
- Replacement cost approach (cost to replace or reproduce).
- Depreciation based on age, condition, and usage.
- Market value of second-hand equipment.
- Inventory:
- Raw materials, work-in-progress, finished goods.
- Valuation based on cost or net realizable value.
- Furniture, Fixtures, and Fittings:
- Market or book value based on age and condition.
- Intangible Assets (if applicable):
- Licenses, patents, or trademarks associated with the factory.
- Other Assets:
- Vehicles, tools, or specialized equipment.
Valuation Methods:
- Cost Method: Based on the current replacement or reproduction cost minus depreciation.
- Market Method: Based on comparable sales of similar factories.
- Income Method: Based on the income-generating capacity of the factory (less common for factory valuation).
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