Tag: Business
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Why do we look at cash flow instead of net income?
When we use the DCF method (Discounted Cash Flow), the focus is right there in the name — we discount the future cash flows of the company to their present value. So why not just use net income?Because profit on paper doesn’t always mean cash in the bank. A company can show a profit but…
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Why Adjusted Book Value Matters in Valuation
Adjusted Book Value (ABV) isn’t the most popular method—but that doesn’t mean it’s not important. In some cases, when valuing a business, it’s the method selected as the most suitable one. Why? Because sometimes, the real value lies in the assets, not the operations.Especially in businesses that: In some cases, the land alone could be…
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“Who would want to buy my business?”
This is a question that often comes up when small business owners start thinking about exit plans — especially when there’s no one to take over. But you might be surprised by how many people could be interested. For example:🔹 A listed company that’s promised shareholders they’ll grow 10% every year🔹 An investor or business…
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💡 How do you value a company?
Not every company can be valued the same way. It depends on: Here are 3 common approaches used in real-world valuation work : 1️⃣ Book Value / Adjusted Book ValueBest for companies that own assets but aren’t really operating. Think of land banks, or businesses winding down. If there’s no cash flow, we look at…
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What if the founders don’t want the same ending?
It’s common:One founder wants to keep growing the company.The other wants to exit and cash out. At first, everyone shared the same vision.But after operating for a while—and especially when the business is profitable and the future looks bright—different goals start to emerge. This is where things can get complicated. 💡 To ensure fairness, the…
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5 financial ratios we often check to understand a company better
Ratios give us a clearer view—how strong, risky, and sustainable the business really is. Here are 5 ratio categories we commonly analyze: These ratios help us tell if the company’s performance makes sense—or if something’s hiding beneath the surface. Want to know what these ratios say about your business? Let’s talk.🟡 ORNA – Clear, independent…
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🔴 5 Red Flags in a Company
1. High Profit, No Cash🧾 Profit looks great, but the cash flow is missing. Could mean aggressive revenue recognition, poor collections, or rising receivables. 2. Misuse of fund – e.g. Large Loans to Directors or Related Parties💸 Money going out… but not to grow the business. This could be a sign of poor governance or…
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When should you value a company using book value instead of future cash flow?
Not every business has a clear growth story.Sometimes, the value lies in what it already owns. ✅ Loss-making companies — no profits, but still have assets✅ Distressed businesses — when you’re thinking about liquidation✅ Asset-heavy companies — factories, real estate, etc. In these cases, book value gives you a better picture than DCF or P/E.…
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🩺 Who needs a valuation report?
Both sellers and buyers. For sellers, it’s not just about putting a price tag on your company.It’s a full health check-up. ✅ Are your projections realistic?✅ Are your costs in control?✅ Is your growth story believable? Sometimes the value isn’t the surprise — the insights are. For buyers, you don’t want to overpay.A good valuation…
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💭 “What’s Your End Game?”
Many business owners pour their life into building their company…But few have a clear plan for what comes next. Here are questions we often ask clients (and ourselves) when preparing a business for the future — whether it’s for sale, succession, or simply long-term sustainability. 🔄 Succession & Leadership 💼 Ownership & Structure 💸 Financial…
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