Why Assets Matter in Valuation

When doing a business valuation, many people focus only on revenue and profitability. But there’s another piece that’s just as important: investment needs.

To value a business properly, we need to know:

• What assets the company relies on (machines, automation, software, equipment, etc.)
• How long these assets will last
• When they’ll need to be replaced
• And how much that replacement will cost

These factors directly affect cash flow, which ultimately affects valuation.

A company can look highly profitable on paper, but if:

• customers take a long time to pay, and
• the upcoming investment needs are larger than the cash available,

…then the business may still face financial trouble.

Profit is important.
But cash + future investment needs matter just as much.

#ORNA #DCF #Consult