Tag: ORNA
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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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💡 “Back-to-Back Investments”: There is no such thing as a free lunch.
Some business opportunities look attractive at first glance. No upfront investment.Cash inflows match cash outflows and it seems like a free lunch – but is it? Recently, we reviewed a proposal where a company would earn revenue from an asset that it doesn’t even own — the asset is leased, and the rental income is…
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Valuing a new project is NOT the same as valuing an existing business.And honestly… it shouldn’t be treated the same.
When we value an existing company, we have real evidence:📌 Actual performance📌 Actual margins📌 Actual customer behavior📌 Actual industry benchmarks But when we value a new project?We walk into a room full of assumptions. Verified assumptions, yes — but still assumptions. And assumptions do one dangerous thing:They love to look more beautiful than reality. That’s…
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Keyman Risk – Real situation from one of our ongoing engagements.
We were hired to do a business valuation for a family business. Operations are running. Financials are provided. Everything looks “normal” on the surface. Until we reached the Q&A stage. Q: “Please break down ‘Other income’ in the P&L.” A: “Interest income and selling of scraps.” Q: “What determines the profit margin differences between products…
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How do we value companies in highly technical industries?(E.g. Solar, power plants, mining, etc.)
At ORNA, we specialise in financial modelling and valuation.For industries that require engineering or technical expertise, we rely on industry-specific reports provided by our clients to ensure our assumptions align with actual operational conditions. Examples include: These reports form the technical foundation of our financial forecasts.From there, we translate the information into revenue projections, cost…
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Sharing Info With a Potential Competitor in M&A — Should You Be Worried?
Our client is planning to sell xx% of its shares to a new strategic investor. One potential buyer showed strong interest. During the NDA stage (Non Disclosure Agreement where each party sign an agreement to not disclose any confidential information of each other) it was discovered that this same company had already acquired over 50%…
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During a recent M&A negotiation, a client came across the term “Earnout Payments.”
In simple terms, an earnout is when a buyer pays part of the purchase price upfront (XXX) — and agrees to pay an additional amount (YYY) later only if the acquired company meets certain performance targets.These targets are often tied to EBITDA, revenue, or gross profit or Non-financial milestones — e.g. achieving a regulatory approval,…
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Does all the debt need to be paid off when a company is being acquired?Short answer: No.
Whether the debt must be cleared before the transaction depends entirely on the deal structure and what both the buyer and seller agree to. There are usually two common scenarios: 1️⃣ The buyer purchases the company debt-freeIn this case, the seller must clear all the debt before the transfer of shares. The purchase price is…
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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…
ORNA Company Limited 