Valuer 2.21

When businesses change hands, buyers and sellers will have many questions to ask and answer regarding past performance, location, synergy expected, etc. It is our contention that the two most important financial questions are:

(1) what is the future expected return, and

(2) what are the risks involved?

Valuer analyses these two components to identify the parameters for negotiation. By this we mean the minimum a seller should expect for the business and the maximum a seller should expect to pay. The future expected return is calculated using the more realistic Discounted Cash Flow method. The process allows a degree of subjectivity in the analysis and we ask that you therefore be practical with your predictions. Valuer uses a questionnaire to assess the risk involved and incorporates this in the final figures by way of a gamma factor added to the Weighted Average Cost of Capital (WACC) used in calculating discount factors.

You can also use Valuer as a forecasting tool, as a means of disciplining yourselves and for setting organizational targets (i.e. sales targets, gross profit, maximum cost, net profit, asset value, etc.). This product should also assist you in the creation of a business plan for acquiring additional finance.

Whatever your primary uses of the Business Valuation Tool - Valuer, we hope that you will achieve real benefit from it. This is the fundamental reason why the product was designed.