Mr. A was considering investing in Company B.
He knows the industry well — high margin, not easy for new players to enter — so becoming a shareholder felt like a good first step into the business.
He reached out to us for a valuation.
During our review, we interviewed Company B’s management together with Mr. A, and we analysed both audited and internal financials (YTD included). We walked through revenue, expenses, and asked questions line by line to understand the business structure.
Along the way, several points became clear:
- Some revenue recorded didn’t actually flow back into the company.
- A number of operations were one-time activities, meaning they shouldn’t be assumed to repeat in the forecast.
- Interest expense was quite large — the business needed to hit a specific level of revenue and gross profit just to operate comfortably.
On paper, the opportunity looked attractive.
But after understanding the numbers and risk profile — especially since Mr. A wouldn’t have management rights — he decided not to proceed.
Not every deal becomes an investment, and that’s okay.
A valuation isn’t only about pricing a company — sometimes it helps investors avoid a decision that doesn’t fit their risk level.
—
If you need help evaluating a business before investing, we’re here to help you make decisions with clarity.
#BusinessValuation #M&A #Investment #DueDiligence #ORNA
ORNA Company Limited 
Leave a comment