The Business Valuation section allows you to build a valuation based on Seller's Discretionary Earnings and Assets.

The numbers used in the Valuation section are pulled from the financial statements setup in Company Financials.  So, it is necessary to set up at least one set of financials in Company Financials before using the Valuation section.

The Valuation section has three components:

  • Valuation Summary
  • Market Multiples
  • Assets & Liabilities

 

Multiples Valuation

This section pulls information from the Income Statement and Seller Adjustments in Company Financials.

  • Select the financial statement you want to use for the valuation.
  • Select Seller Discretionary Earnings under Valuation Base (Sales, EBITDA, EBIT and Net Income are also available if you choose to use those)
    • The selected value should appear in the left box.
  • Use the Multiple Range sliders to select the valuation multiple you want to apply.
    • Bar Chart: will display the low to high valuation range based on the base you selected and the multiples range.
    • Valuation Midpoint: this is the midpoint of the valuation range based on the base and multiples.  The value corresponds the middle bar in the bar chart.

Assets & Liabilities

This section pulls information from the Balance Sheet in Company Financials.

  • Select the financial statement you want to use for the valuation.
  • The Assets and Liabilities from the selected statement will populate the table.
    • The amount you input into Company Financials is on the left column as Book Value
    • The valuation amount is on the right column as Market Value
    • You can value each asset and liability by adjusting the percent in Market Adjustment.
    • The bottom value represents all the Assets minus all the Liabilities (i.e Equity Value)
  • Valuation Midpoint: The Market Value for Assets - Liabilities. This matches the number at the bottom of the Market Value column.

Valuation Summary

The Valuation Summary reflects the valuation of Seller's Discretionary Earnings in the Multiples Valuation section.

If you wish to add the valuation of Assets & Liabilities to your valuation.  Select to add and the summary value will update.