Tag: Consult
-
What is a “Terminal Value”?
If you’ve ever read a business valuation report and saw the term Terminal Value, it simply means this: When we value a company, we normally forecast around 5 years into the future.But companies don’t stop operating after year 5. So instead of forecasting forever, we estimate the value of the business after the forecast period,…
-
Thinking of buying or selling a business?
Here’s the simple version of how an M&A deal actually works. A lot of people think it’s just “meet → agree price → sign the contract.”But in reality, there’s a proper flow — 1️⃣ NDABefore sharing any sensitive info, both sides sign an NDA.Meaning: “You’ll see my secrets. Please don’t share them.” 2️⃣ MOU /…
-
It’s beginning to look a lot like Christmas 🎄Peak season is coming… and for many businesses, sales are about to shoot up.
This is why, when we do a business valuation, we always ask for year-to-date performance (internal numbers are perfectly fine) and at least 3 years of historical data. Because not every business behaves the same throughout the year. Some are seasonal — Christmas, Chinese New Year, school terms, tourism periods, you name it. Some have…
-
Should we include future benefits from an investor’s network when valuing a company?
A while ago, Company A hired us to value Company B before making an investment.After the deal, Company A expects to bring new business deals to Company B through their own connections. Both companies asked the same question: “Should these benefits be included in the valuation of Company B?” Our answer was simple — No.…
-
💡 Why AR Days, AP Days, and Inventory Days Matter in Business Valuation
When we do business valuation, we don’t just look at the usual numbers like revenue, profit, or investment.Another important factor to consider is the cash conversion cycle (CCC). In short, CCC tells us: This cycle determines how efficiently the company turns operations into cash — and ultimately, how healthy its liquidity is. So it’s not…
-
Can I get a business valuation from ChatGPT (or any AI tool)?
The answer is… yes and no. Yes — you can insert your company’s financial statements and ask AI to calculate a valuation. You’ll probably even get a clean-looking number, maybe with a DCF model attached. But the thing is — unless you know what to input, the result won’t be realistic. AI will happily crunch…
-
Why we have so many questions when doing a business valuation
One of the most common methods we use to calculate a company’s value is the Discounted Cash Flow (DCF) model. This approach requires not just the historical performance, but also a 5-year forecast — which means we need to deeply understand how the business actually operates. If the company sells products, we break things down…
-
Can we do a business valuation before year-end? Or do we have to wait for the audited financial statements?
As the year comes to a close, we often get this question from clients who want to start a valuation but aren’t sure if they should wait until the new financials are ready. The short answer is no — you don’t have to wait. What we usually need are: If it’s a listed company, we’ll…
-
💡 Why You Should Always Read the Auditor’s Comments
We’re currently gathering information for a business valuation, and one of the first documents we ask for is the audited financial statements. Instead of jumping straight to sales, profit, or debt levels,we always start with the very first page — where the auditors put their comments and signature. Because if there’s anything that doesn’t sit…
-
Why some revenue are useless in business valuation
Sometimes when we do business valuation using the discounted cash flow (DCF) method, we actually have to ignore some parts of the revenue. Here’s why 👇 1️⃣ One-time event – it happened once and won’t happen again.2️⃣ Discontinued operation – the company no longer operates that business line, so it shouldn’t appear in future forecasts.3️⃣…
ORNA Company Limited 