“When a forecast looks too good to be true…”

Sometimes during a business valuation, management shows us a revenue projection that suddenly jumps far above the last few years.

Maybe revenue was flat for 3 years…
Then the forecast shows a big surge next year.

At that point, we have to ask a simple question:

“What is driving this growth?”

If the answer is “We have a big customer coming in”, the next step is evidence.

That’s when we may ask to see the purchase order or the contract with the customer.

Not because we don’t trust management.
But because a forecast should be supported by something real.

When valuation relies heavily on projected revenue, even one major contract can change the entire valuation.

So sometimes financial advisors have to be a little blunt and ask for documents.

Because good valuation is not just about models.

It’s about verifying the story behind the numbers.

#ORNA #BusinessValuation #DCF #Forecasting #FinancialAdvisory