Author: ORNA Company Limited

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: These factors directly affect cash flow, which ultimately affects valuation. A company can look highly profitable on paper, but if: …then the business…

Sounds like a K-drama title, but we’re actually referring to the impact of the war on our target company’s packaging costs. During recent valuation work, several customers shared the same concern:“Costs have jumped so much that margins collapsed.” And they’re right — this kind of shock can heavily affect projection assumptions. However, one bad year…

In business valuation, sometimes we are required to create 2 scenarios: 1️⃣ Stand-alone valuation The company is valued purely on its own performance. This is the most popular method because the buyer shouldn’t pay for benefits that come from themselves. 2️⃣ Valuation with synergy benefits This approach estimates the value after the company becomes part…

A client came to us with a tempting deal. They inherited a piece of land.A target company—high revenue, high barriers to entry—wanted to use that land as collateral to borrow more money from a bank.In return? Shares in the company. At first glance, it looked exciting.We received audited financials, internal statements, and spoke with management…

We recently worked on a valuation where increasing revenue growth actually led to lower net income. This is because growth often comes with additional fixed costs — new staff, larger facilities, expanded operations. If the incremental revenue isn’t enough to cover those costs, profits can actually decline in the short term. So during expansion, you…

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…

When valuing companies with high levels of debt, one thing often becomes clear: Some businesses are operating very close to the survival line. Interest expenses and other fixed costs don’t wait.Because of this, companies often need to maintain certain numbers just to keep enough cash for daily operations. In many cases, survival depends on three…

When we do a business valuation, the most important item isn’t revenue nor profit. It’s the cash. Because at the end of the day, a company survives on cash — not accounting entries. Revenue can be recorded…but the cash might not come in yet. Expenses can be booked…but the payment may not have gone out.…

Sometimes, the hardest part of reviewing a company is seeing how much financial pressure it has gone through. We recently evaluated a company with a history of losses and a significant amount of bank debt. Under normal circumstances, the repayment burden would have severely strained its cash flow. But instead of defaulting, the company negotiated…