Tag: Valuation
-
A Hard to Resist Investment
“This company is performing very well. Sales are large and have been strong for years. They want me to be part of it, and it’s very hard to resist. This industry is also very difficult to get into. This is a really good opportunity, right?” This was a question a friend asked me before deciding…
-
Why can’t every revenue item be included in a business valuation?
A client recently asked why some revenue streams were excluded from our financial forecast during a business valuation. The answer is simple: a valuation is only as reliable as the evidence supporting it. In this case, certain revenue was recorded in the company’s internal financial statements, but: As valuation professionals, we cannot include figures simply…
-
“Does our product quality mean nothing in a DCF valuation?”
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…
-
“We have two companies, but we want to sell them as one deal… is that possible?”
We got this question from a client recently. Both companies operate in the same business — they were only separated in the past due to licensing reasons. Now that they’re considering a sale, they’d prefer to present everything as one combined deal. Short answer: yes, it’s possible. But there are a few important things to…
-
A detailed forecast doesn’t mean a realistic valuation
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:…
-
Not all history deserves a place in valuation.
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…
-
Why Assets Matter in Valuation
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…
-
“It’s ok to not be ok.”
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…
-
Value a Business as Stand-Alone or Synergy Valuation
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…
-
🚩 When “high revenue” isn’t enough: a real case we just handled
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…
ORNA Company Limited 