Author: ORNA Company Limited
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🚀 How to tell if a startup is really going to fly
A customer once asked us about investing in a tech startup.Both companies were from a construction systems background — so there were clear synergies.But the question was simple: “How do we know if this startup will actually fly?” One quick check we used is something called the Rule of 40. It’s a simple concept popularized…
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How are we doing compared to our peers?That’s a question we often get from customers.
They want to know —👉 Is our profit margin good enough?👉 Are we spending too much?👉 Or maybe investing too little? Usually, we can benchmark against listed companies since their annual reports are public and quite detailed. For non-listed companies in Thailand, you can also check the short version of financial statements on the DBD…
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Who would be interested in our company?
A customer recently asked us this question — Usually, we see potential buyers who are somehow related to your business: Suppliers who want to secure their supply chain, Customers who want to control upstream, or Competitors who want to expand market share. Basically, someone who would benefit when the two businesses combine — when 1…
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💡 Should a company pay out all retained earnings before bringing in a strategic partner?
One of our clients is currently exploring an M&A deal with a strategic investor.Before the transaction, they’re considering paying out a large amount of retained earnings as dividends. Why?Because if it’s not paid before the deal, the new shareholders would also share that retained profit — even though it was earned before they joined. That…
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Why some DCFs have a “Terminal Value” — and some don’t.
When doing a valuation, we often see a terminal value added at the end of the DCF model.But not every company has one. Why? For companies that can be assumed to continue operating indefinitely — like manufacturers, trading firms, or service businesses — analysts usually project cash flows for 5 years, then assume a terminal…
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💡 Why is Book Value sometimes higher than Market Value?
We were recently asked by a client:“Why is the book value (shareholders’ equity in financial statements) higher than the market value (stock price × total shares)?” Let’s break it down. 1️⃣ Book Value Found on the balance sheet. Represents what shareholders would theoretically get if the company was liquidated (sell assets, pay debts). 2️⃣ Market…
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Why is PE Ratio so popular?
Even though the Price-to-Earnings (PE) ratio is not the most reliable way to value a business, it’s by far the most popular—especially for non-listed companies. Why?✅ It’s quick.✅ It’s easy.✅ You can do it yourself. Unlike the Discounted Cash Flow (DCF) method, which takes weeks (sometimes months) to build assumptions and projections, PE gives you…
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💡 Deals that Win vs. Deals that Fail
Why do some business deals close smoothly, while others fall apart? More often than not, it comes down to price. Terms and conditions? Usually negotiable. Price? Always sensitive. 👉 The buyer pushes for the lowest price to maximize future profit.👉 The seller aims for the highest price to maximize return. The deals that succeed are…
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💡 Why is share price higher than book value?
When we do a company valuation, we usually discount future cashflows back to today’s value. That’s why the price sometimes looks “high” — there’s a premium. The shareholders who sell get the cash today, without waiting 5 or 10 years for the value to accumulate. So in most cases, if the company is doing fine,…
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Using P/E Ratios to Estimate Your Company’s Value
When customers ask about valuing their company with the Price-to-Earnings (P/E) method, here’s how it works: Find comparable companies – We look at listed companies in the stock market that operate in the same or similar business as yours. Calculate their P/E ratios – P/E = Price per share ÷ Net income per share (EPS).…
