Category: Business valuation
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💡 Thought of the day: How non-listed companies can estimate their value
If you’re running a non-listed company and curious about its value, a simple starting point is the multiples method. 👉 Take listed companies with similar business operations.👉 Look at their P/E (price-to-earnings) and P/B (price-to-book) ratios.👉 Apply the average multiples to your own earnings or book value. This can give you a rough idea of…
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“Where do you see your company in 5 years?”
Sounds like a job interview question, right?But actually, it’s one of the most important questions in a business valuation too. When we prepare a valuation report, we don’t just pull numbers out of thin air. A big part of the assumptions comes directly from the management team — the insiders who know best what’s possible…
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So you want to sell your company?
One of the first questions we often get is: what’s the first step if you’re planning a share restructuring — selling some or all of your shares? The answer: set up a data room.It’s basically a shared folder that contains all the information investors, advisors, lawyers, and other parties need to review before making a…
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🔎 How to know if a company’s projection makes sense
When we do a valuation, one of the first things we ask for is the company’s forecast — usually a 5-year outlook of revenue, costs, and profit. But how do we know if those numbers are realistic? We need to see the backup. For example: On top of that, we check: The numbers don’t have…
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Why do some companies pay more dividends than others? 💸
A client recently asked me this, and it’s actually a great question. A listed company usually has a dividend payout policy stated for investors to know what to expect – some pay as high as 60% while some pay very small %. Here are the main factors that influence how much a company decides to…
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💡 “If the company has so much cash, shouldn’t it just pay 100% dividend every year?”
Our customer asked us one day. And it’s a good question — because if you’re the new investor, wouldn’t you prefer to get all the cash back every year? Here’s the thing 👉 In a DCF valuation, whether the company pays 30% or 100% dividend, the value doesn’t change much. Why? Because in valuation theory,…
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Why is cash more important than profit?
When valuing a company, one of the most common methods is Discounted Cash Flow (DCF). And as the name suggests, we look at cash — not profit. A company can show strong revenue and profit margins on paper, but that doesn’t guarantee it has the cash in hand. For example: This is why in business…
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How do you repay debt when you don’t have cash?
At the beginning of this year, Company A borrowed money from Company B.The deal was straightforward: repay the loan plus interest by year-end. But there was a condition.If Company A couldn’t repay in cash, the repayment would be in shares. So the big question became:👉 How much is one share of Company A actually worth?…
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“We’re making 1k a year and we have no debt. How much can we sell our business for?”
That was the first question from one of our clients. On paper, it was the dream company: It was like reading the definition of a cash cow in a textbook. But valuation is never just about the headline numbers.When we dug into their revenue structure, we found most of their products had razor-thin margins —…
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Why a company needs specialization
During a recent management interview, we asked about revenue structure and profit margin for each product category. This company distributes two types of goods: That’s the beauty of specialization:👉 The harder it is for competitors to copy what you do, the higher your margins.👉 The higher your margins, the more valuable your business becomes. When…
ORNA Company Limited 