Comparative Value Analysis: This method, also known as the reference value method, uses transaction data from comparable vessels to determine value. Transaction data includes reported sales and newbuilding prices from our comprehensive database. Adjustments are made depending on the specifications of the individual vessel.
Discounted Cash Flow (DCF): A valuation technique in which projected future cash flows (usually time charter revenues) are discounted to a present value using the time value of money.
Long-Term Asset Value (LTAV): A special case of earnings-based analysis developed by the Hamburg Shipbrokers' Association (VHSS). Weselmann has been a member of the LTAV working group since its inception and has played a key role in the development of the method. The LTAV uses standardized parameters and a uniform discount rate. It is based on the long-term revenue potential of the vessel. This is particularly useful when there are market distortions or extreme fluctuations. Standardized and regularly revised parameters ensure transparency in the market.
Material Asset Valuation: The asset value analysis is usually applied in cases where neither the comparative value method nor an earnings-based approach are practicable. In practice, this is usually the case for highly specialized types of vessels that rarely or never appear on the sale and purchase market and for which there is no charter market, such as pilot boats. In the tangible asset analysis approach, the asset is mentally broken down into its components, such as hull, main engine, navigation equipment, etc. Each component is assigned an appropriate value and these are added together to derive the asset value.
For more information on the various valuation methods and for advice on when to recommend and best use which, please contact our office.