“Our land is worth much more than book value.”

During an M&A pitch, management often tells us this.

Totally fair point.
But here’s the thing 👇

For business valuation, book value is usually not the issue.

When we value a going concern, we mainly use DCF.
That means the value comes from future cash flows, not how cheap or expensive the land looks on the balance sheet.

So even if the land was bought 20 years ago and is now worth 3–4x more,
👉 it does not directly change the DCF value.

Book value only becomes critical in a very different situation:

• The company is loss-making
• There’s no clear path to recovery
• Or the business is expected to cease operations

In that case, the valuation shifts toward an asset-based approach,
and we would recommend an independent asset appraisal to mark assets to market.

#ORNA #BusinessValuation #DCF