Financial Instrument Valuation
The control of financial instruments is essential to secure your strategic decisions and ensure the solidity of your operations.
An accurate assessment of debts, preferred shares or derivatives reinforces transparency, informs your decisions and sustainably supports the governance of your company.
What is a valuation of financial instruments?
Evaluating a financial instrument means analysing its contractual characteristics, risks and future flows in order to determine its fair value. This approach concerns both debts, bonds and shares, preferably as well as derivatives.
Valuation makes it possible to secure transactions, to comply with accounting and regulatory standards, and to give managers a clear vision for their strategic decisions.
Step 1
Scope of the mission
Define the object, context and objectives of the valuation.
Step 2
Information gathering
Gather all the information necessary to understand and model instruments.
Step 3
Modeling
Select and implement the appropriate evaluation models according to the nature of the instrument.
Step 4
Preliminary report
Present the initial value estimates and the methodology used in a synthetic, structured document.
Step 5
Presentation of the results
Share the preliminary results with the client, explain the models selected and the underlying assumptions.
Step 6
Update the model
Adjust hypotheses or parameters (volatility, horizon, exercise rate, probability of achievement, etc.).
Step 7
Final report
Finalize and submit a complete, clear and defensible report.
What is a valuation of financial instruments?
The valuation of financial instruments is essential to correctly measure the value of debts, bonds, preferred shares or derivatives. It makes it possible to secure strategic decisions, to meet accounting and regulatory standards, and to strengthen the confidence of investors and partners.
Accounting valuation
Guarantee compliance with IFRS/Swiss GAAP standards by evaluating the fair value of financial instruments on the balance sheet and carrying out the impairment tests necessary to accurately reflect the economic situation of the company.
Negotiation
Support transactions in financial instruments by ensuring a rigorous analysis of transfer prices and strategic support for discussions and arbitrations.
Financing
Structure the issuance of shares or convertible bonds, design incentive plans and value options to build balanced and transparent financing.
Risks
Evaluate derivatives, hedging strategies and exposure sensitivity in order to control volatility and secure financial flows.
Modeling
Develop complex scenarios, simulate performance across markets and prepare stress tests to reinforce strategic robustness.
Piloting
Analyze the impacts of hybrid instruments, compare financing structures and anticipate scenarios to optimize the company's strategic decisions.
Black-Scholes and Merton Method
We use various recognized approaches in order to reflect all the dimensions of an asset or financial instrument. The combination of these methods makes it possible to secure the reliability and robustness of the results.
- Discounted cash flow (DCF) approach:
Valued on the basis of expected future cash flows, discounted at the cost of capital. - Comparable market approach:
Compare with recent transactions or relevant stock market references. - Cost approach:
Evaluate the cost of replacing or duplicating the asset. - Yield value:
Relies on the beneficiary capacity generated over time.
Diverse range of clients advised
Family Offices
Executives/Management
Family shareholders
Private equity funds
Family businesses
SMES
operations analyzed
years of expertise
clients advised
Discover our TRACK RECORD
The transactions presented were carried out by, with the contribution of, or with the participation of members of the Hectelion team in the context of functions performed currently or previously.
Frequently Asked Questions
To determine its fair value for accounting, tax or transaction purposes, according to IFRS or Swiss GAAP RPC standards.
Theoretical value is based on a financial model (e.g. Black-Scholes), while market value reflects the price observed in a transaction.
Through a probabilistic approach discounting future payments according to performance scenarios and an appropriate discount rate.
It ensures the reliability of financial statements and compliance with fair value requirements imposed by auditors.
By combining the cost of equity and the cost of debt weighted according to their share in the financial structure.
Fair value reflects the exchange price in an active market; intrinsic value corresponds to economic value based on fundamentals.
Generally at each annual close or when a significant event changes its value.
Objectivity, regulatory compliance and increased credibility with investors, auditors or authorities.
Black-Scholes, binomial or Monte Carlo models, depending on the nature and complexity of the underlying.
The volatility of the underlying asset, the risk-free rate, maturity, liquidity and contractual conditions.