Tag: ORNA

A client asked us this yesterday. After all, if you’ve spent years improving your product, building customer trust, and maintaining quality standards, it feels strange when a valuation model doesn’t have a line item called “Product Quality.” The answer is: Product quality matters. Just not directly. A DCF values future cash flows, and those cash…

A client once gave us a very detailed forecast for valuation. And honestly—we were impressed. Everything was there.Revenue broken down by source.Costs clearly structured.SG&A thoughtfully laid out. It made our job easier… but not simpler. Because no matter how detailed a forecast is, one question remains: Can it actually happen? Here’s how we pressure-test it:…

We recently worked on a company where the past 3 years looked busy with multiple projects and  different revenue streams. Small engineering jobs here and there. However, something changed. A new contract.A “big customer.”A completely different business model. So the question was: Do we value the company based on what it used to do…or what…

When doing a business valuation, many people focus only on revenue and profitability. But there’s another piece that’s just as important: investment needs. To value a business properly, we need to know: These factors directly affect cash flow, which ultimately affects valuation. A company can look highly profitable on paper, but if: …then the business…

Sounds like a K-drama title, but we’re actually referring to the impact of the war on our target company’s packaging costs. During recent valuation work, several customers shared the same concern:“Costs have jumped so much that margins collapsed.” And they’re right — this kind of shock can heavily affect projection assumptions. However, one bad year…

In business valuation, sometimes we are required to create 2 scenarios: 1️⃣ Stand-alone valuation The company is valued purely on its own performance. This is the most popular method because the buyer shouldn’t pay for benefits that come from themselves. 2️⃣ Valuation with synergy benefits This approach estimates the value after the company becomes part…

A client came to us with a tempting deal. They inherited a piece of land.A target company—high revenue, high barriers to entry—wanted to use that land as collateral to borrow more money from a bank.In return? Shares in the company. At first glance, it looked exciting.We received audited financials, internal statements, and spoke with management…

We recently worked on a valuation where increasing revenue growth actually led to lower net income. This is because growth often comes with additional fixed costs — new staff, larger facilities, expanded operations. If the incremental revenue isn’t enough to cover those costs, profits can actually decline in the short term. So during expansion, you…

Sometimes during a business valuation, management shows us a revenue projection that suddenly jumps far above the last few years. Maybe revenue was flat for 3 years…Then the forecast shows a big surge next year. At that point, we have to ask a simple question: “What is driving this growth?” If the answer is “We…