We Build Great Valuation Models
A good business valuation is not only about determining an accurate and reasonable value but also about being able to defend it if needed with a clear and concise explanation supporting the conclusions.
- Includes three-statement financial model
- Backed by credible assumptions and industry research
- Checked for accuracy
- Compared to most recent transactions in your industry
- Combines various valuation methods
Why do I need a professionally-built valuation model?
- Valuation is a contentious subject, everyone has an opinion - well-built valuations are objective and align the interests of all parties involved
- It arms you with a value based on merits - a good valuation puts you in a position to raise more money and maintain more equity in your company
- A good valuation is backed by justified assumptions and informs investors about the risk of investing in your business
What makes a valuation model great?
- Flexibility and adaptability
- Clear depiction of risk vs. reward
How is business valuation calculated?
There are a number of different methods that can be used to calculate business valuation. The most common is the discounted cash flow (DCF) method, which takes into account the company's future cash flows and discounts them back to the present value. This gives a more accurate picture of what the business is worth today. Other methods include the multiple approach (which looks at the company's earnings or revenue and multiplies them by a certain number) and the asset-based approach (which looks at the value of the company's assets and liabilities).
Which business valuation method is best?
The number one mistake when it comes to business valuation is using the wrong method.
There is no right or wrong method for valuing a business. It all depends on the specific situation and what data that you have available to work with. For example, if your company's revenue growth is slowing down, then the multiple approach would not be recommended. However, if you have a lot of assets that are easily convertible into cash, then the asset-based approach would be a better option. Speak with one of our experts to help you choose the right valuation method for your business.