Tag: DCF
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“Why DCF looks clean on paper but is messy in real life”
Today I’m stuck in a DCF (Discounted Cash flow) model. Not because the formula is hard. But because I’m scrolling through hundreds of asset rows, checking purchase dates one by one, just to understand:– what was real CAPEX– what was replacement– and what should (or shouldn’t) be repeated in the forecast In theory, CAPEX is…
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“Does your business valuation reflect the actual performance after the M&A deal?”
A customer asked me this today. Short answer: No — we don’t usually go and check. The thing is a valuation isn’t a crystal ball.It doesn’t tell you exactly how the business will perform. What it does give you is a logic-based price range built from assumptions, scenarios, and the information available at that point…
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Why do we always ask for your company’s asset details when we do a business valuation?
Because revenue and profit don’t tell the whole story. When we value a business using DCF (Discounted Cashflow), we need to understand what the company has invested in before, how the assets are depreciating, and what future investments are coming. Are there machines that need to be replaced soon?Is there an investment cycle?Is the factory…
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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…
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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…
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“The company is a petrol station… but next year we’ll invest in transportation too.”
We often hear something like this during valuation projects. When we do a business valuation using the DCF (Discounted Cash Flow) model, sometimes the company hasn’t fully decided on their next move. Maybe they’re unsure which project to pursue, or whether they should expand or stay focused. That’s where scenario analysis comes in.We can build…
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Why do we need to break down revenue structure?
Each revenue stream carries its own story. Some lines of business generate higher margins because they require specific know-how, while others face intense competition and are easily replaced — leading to thinner margins. That’s why we can’t simply take total revenue, apply a growth rate, and call it a forecast. When we request for information,…
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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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📌 Valuing a startup with no financial history
It’s been a busy few weeks — ORNA just wrapped up a valuation project for a client who wanted to invest in a very early-stage SaaS startup. The company was so new that there was very little financial history. What we had was: 🧩 From there, we started piecing things together. ✅ First step: Ask…
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