Tag: Valuation

Business Valuation, Excel DCF Models, business valuation calculator.#Business #valuation #calculator


business valuation calculator

Business valuation calculator

Business Valuation in Excel

Business valuation calculator Business valuation involves the study of many aspects of a business, including anticipated revenues and expenses. Because cash flows extend over time, an Excel discounted cash flow (DCF) model can be a helpful tool.

A Discounted Cash Flow analysis for a business valuation requires the analyst to consider two components: (i) a projection of ongoing revenues and expenses of the foreseeable future; and, (ii) a determination of the discount rate to be used.

Ongoing Revenues and Expenses

Projecting a business expected ongoing revenues and expenses requires expertise in the business specific field. For example, a DCF analysis for purchasing an office tower requires input from commercial real estate specialists. Similarly, a DCF analysis of a proposed mine requires the involvement of geologists.

Discount Rate

Selecting the discount rate requires us to consider two components: (i) the cost of capital; and, (ii) the risk premium associated with the stream of projected net revenues.

Capital is a productive asset that commands a rate of return. If a business purchase is financed by debt, the cost of capital simply equals the carrying charges on the finance loan.

If the business purchase is financed by the owner’s equity, the relevant cost of capital would be the opportunity cost of the capital – the net income that the same capital would generate if committed to its next-best alternative.

The choice of discount rate must consider not only the owner s cost of capital, but also the risk of the business investment. Some types of investment are more risky than others. In the case of a riskier business, it is appropriate to include a higher discount rate.

Business Valuation Model in Excel

The Business Valuation Model projects the discounted present value of a future stream of expected revenues and expenses. The model requires the user to input a stream of anticipated revenues and expenses, as well as the discount rate to be used. The cumulative value of discounted revenue is shown in the far-right column.

Business valuation calculator


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3 Business Valuation Methods, business valuation.#Business #valuation


3 Business Valuation Methods

Business valuation

There are many reasons to have an up-to-date business valuation. For example:

  • You may need to sell the business due to retirement, health, divorce, or for family reasons.
  • You may need debt or equity financing for expansion or due to cash flow problems. Potential financiers or investors will want to see that the business has sufficient worth.
  • You may be adding shareholders (or one or more shareholders may wish a buyout). In this case, share value will need to be determined.

Regardless of the reason, how much your business is worth depends on many factors, from the current state of the economy through your business’s balance sheet. If for example, similar businesses in your area have recently sold, the value of your business will be determined in large part by the selling price of the previous sales.

Get It Done Right

Business owners should not do their own business valuation. This is too much like asking a mother how talented her child is. Neither the business owner nor the mother has the necessary distance to step back and answer the question objectively.

So to ensure that you set and get the best price when you re selling a business, get a business valuation done by a professional, such as a Chartered Business Valuator (CBV). In the U.S., you can find Business Valuators through the website of the American Society of Appraisers (ASA) while in Canada you can find them through the Canadian Institute of Chartered Business Valuators.

A Business Valuator (or anyone valuating your business such as an accountant) will use a variety of business valuation methods to determine a fair price for your business, such as:

Three Business Valuation Methods

1. Asset-Based Approaches

Basically, these business valuation methods total up all the investments in the business.

Asset-based business valuations can be done on a going concern or on a liquidation basis.

  • A going concern asset-based approach lists the business s net balance sheet value of its assets and subtracts the value of its liabilities.
  • A liquidation asset-based approach determines the net cash that would be received if all assets were sold and liabilities paid off.

Using the asset-based approach to value a sole proprietorship is more difficult. In a corporation, all assets are owned by the company and would normally be included in a sale of the business. Assets in a sole proprietorship exist in the name of the owner and separating assets from business and personal use can be difficult.

For instance, a sole proprietor in a lawn care business may use various pieces of lawn care equipment for both business and personal use. A potential purchaser of the business would need to sort out which assets the owner intends to sell as part of the business.

2. Earning Value Approaches

These business valuation methods are predicated on the idea that a business s true value lies in its ability to produce wealth in the future. The most common earning value approach is Capitalizing Past Earning.

With this approach, a valuator determines an expected level of cash flow for the company using a company s record of past earnings, normalizes them for unusual revenue or expenses, and multiplies the expected normalized cash flows by a capitalization factor.

The capitalization factor is a reflection of what rate of return a reasonable purchaser would expect on the investment, as well as a measure of the risk that the expected earnings will not be achieved.

Discounted Future Earnings is another earning value approach to business valuation where instead of an average of past earnings, an average of the trend of predicted future earnings is used and divided by the capitalization factor.

What might such capitalization rates be? In a Management Issues paper discussing How Much Is Your Business Worth? , law firm Grant Thornton LLP suggests:

Well established businesses with a history of strong earnings and good market share might often trade with a capitalization rate of, say 12% to 20%. Unproven businesses in a fluctuating and volatile market tend to trade at much higher capitalization rates, say 25% to 50%.

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Valuation of a sole proprietorship in terms of past earnings can be tricky, as customer loyalty is directly tied to the identity of the business owner. Whether the business involves plumbing or management consulting, will existing customers automatically expect that a new owner delivers the same degree of service and professionalism?

Any valuation of a service oriented sole proprietorship needs to involve an estimate of the percentage of business that might be lost under a change of ownership. Note that this can be mitigated in many cases, such as when a trusted family member (who may already be familiar with the client list) takes over the business.

3. Market Value Approaches

Market value approaches to business valuation attempt to establish the value of your business by comparing your business to similar businesses that have recently sold. Obviously, this method is only going to work well if there are a sufficient number of similar businesses to compare.

Assigning a value to a sole proprietorship based on market value is particularly difficult. By definition,​ sole proprietorships are individually owned so attempting to find public information on prior sales of like businesses is not an easy task.

Although the Earning Value Approach is the most popular business valuation method, for most businesses, some combination of business valuation methods will be the fairest way to set a selling price.

Non-Competition Clauses Can Affect Valuation

Non-competition clauses are frequently included in agreements for the sale of a business, particularly in cases where goodwill forms a significant part of the valuation.

No one wants to purchase a business on the assumption that current customers will continue to patronize the business only to have the previous owner immediately join a competitor or open a similar business in the same area.

Non-competition clauses typically contain restrictions such as:

  • Forbidding the seller from opening up a competing business in the same geographical area
  • Attaching a time limit to competing activity – for example the buyer may request that the seller not engage in direct competition for a period of five years

Non-competition agreements can be a thorny legal issue and are often the subject of court cases between buyers and sellers after a business is sold. From a legal standpoint, to be enforceable the restrictions placed in a non-competition clause must be clearly defined and reasonable . Non-competition covenants can be nullified by the courts if it is determined that enforcement places overly broad and/or unreasonable restrictions on the seller s ability to continue his/her trade and earn a living. Non-competition clauses should be reviewed by the legal representatives of the buyer and seller prior to the sale of the business.

What About Franchise Businesses?

Franchise agreements generally define how a franchise can be sold, and these vary by franchise vendor — check your franchise contract. Some contracts stipulate that the franchisors will buy back your franchise directly for a fixed price. Others provide assistance with valuation and locating a buyer, as it is in their best interest to make sure that the business continues uninterrupted.

The Best Choice May Be a Combination

Although the Earning Value Approach is the most popular business valuation method, for most businesses, some combination of business valuation methods will be the fairest way to set a selling price. The first step is to hire a professional Business Valuator; he or she will be able to advise you on the best method or methods to use to set your price so you can successfully sell your business.


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The Halas Business Valuation System (HBVS) – Since 1985, business valuation.#Business #valuation


Business valuation

When a Business Owner/CEO is planning to exit a business in the immediate or mid-term future, an HBVS business valuation can provide crystal clear guidance on the critical steps to be taken to improve its market value at the time of sale. When a prospective Business Buyer uses HBVS to assess a business for possible acquisition, our three decades of valuation experience provide a platform by which factors of cash flow and assets are meticulously verified which then can (or cannot) contribute to the real world value of the business under consideration.

Business valuation

When placing a value on a business, accuracy is vital. Business valuation is our sole activity and we are happy to help and advise. – Paul Halas

The HBVS business valuation and business appraisal process begins when we forward our package of background information on the Halas Business Valuation Appraisal System which has been providing business valuations and appraisals since 1985. After the need, objective and timing of the business valuation project is established, the client’s most recent financial records are requested for initial valuation analysis. There is no charge for this preliminary review and all submitted information is kept 100% confidential. Once the data is received and assessed, the client is advised if a business appraisal is viable, the process steps involved, the total cost, time needed for completion, then confirmed with a firm price proposal in writing.

Business valuation

HBVS BENEFITS:

  • Affordable For Any Business
  • Completion In Days Not Weeks
  • Easy To Implement System
  • 8 Proven Market Driven Formulas To Produce Real World Value
  • For ASAP Response Call 704-364-4440

Business valuation

VALUATIONS REQUIRED FOR:

Sale/Purchase of Business,

Exit Estate Planning,

Shareholder Buy In/Out,

Take Overs Disputes,

Minority Mkt Discounts,

Tangible Intellectual Asset Valuations,

Justification of Purchase

Business valuation

A FEW WORDS FROM RECENT HBVS CLIENTS:

I would very much like to thank you for your prompt and professional service. Your valuation result and final report was impressive and by all standards comprehensive and complete.


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Moneychimp: Stock Market Investing, Online Calculators, Valuation Models, and more, business valuation calculator.#Business #valuation

business valuation calculator

Business valuation calculator

Business valuation calculatorBusiness valuation calculatorBusiness valuation calculatorBusiness valuation calculatorBusiness valuation calculatorBusiness valuation calculatorBusiness valuation calculator

Business valuation calculator

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Business valuation calculator


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Transaction Advisory Services – Valuation – Business Modelling – EY – United Kingdom, business

Transaction Advisory Services

Business valuation

  • Share

Valuation & Business Modelling

Valuation

The need for transparent and robust valuations to support corporate transactions and to meet regulatory and accounting requirements has increased. But justifying the value of assets and liabilities has grown more complex and critical for most businesses. Our experienced professionals bring excellence in accounting, taxation, and financial due diligence to provide you with valuation advice for a multitude of purposes.

Business Modelling

Building an effective business model, whether it’s to evaluate a transaction, a new market opportunity or for other strategic purposes, is a complex and difficult task.

Our business modelling professionals can help you carry out the model review, model support and model-build activities you need to make key decisions and improve your strategic outcomes.

Economic Advisory

Economic Advisory uses the fundamental principles of economics to address client needs in the areas of policy, regulation and commercial decision making. We draw on the breadth of EY s capabilities and global reach, and underpin our work with rigorous, evidence-based quantitative analysis and deep sector expertise. Visit our webpage to find out more.

Financial Modelling Training

Established over 20 years ago, the EY Business Modelling team has grown to become the largest team of dedicated financial modelling specialists in the UK. The EY Financial Modelling Training team specialises in providing courses that cover a range of different modelling disciplines, transaction areas and industry sectors. Our courses are delivered around the world by experienced financial modelling practitioners who also conduct modelling advisory work for our clients.

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Contact us

Business valuationAdrian Nicholls

Head Partner – Valuation Business Modelling

+44 (0)20 7951 3853

Connect with us

Stay connected with us through social media, email alerts or webcasts.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst Young Global Limited, each of which is a separate legal entity. Ernst Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Tags : ,

Transaction Advisory Services – Valuation – Business Modelling – EY – United Kingdom, business

Transaction Advisory Services

Business valuation

  • Share

Valuation & Business Modelling

Valuation

The need for transparent and robust valuations to support corporate transactions and to meet regulatory and accounting requirements has increased. But justifying the value of assets and liabilities has grown more complex and critical for most businesses. Our experienced professionals bring excellence in accounting, taxation, and financial due diligence to provide you with valuation advice for a multitude of purposes.

Business Modelling

Building an effective business model, whether it’s to evaluate a transaction, a new market opportunity or for other strategic purposes, is a complex and difficult task.

Our business modelling professionals can help you carry out the model review, model support and model-build activities you need to make key decisions and improve your strategic outcomes.

Economic Advisory

Economic Advisory uses the fundamental principles of economics to address client needs in the areas of policy, regulation and commercial decision making. We draw on the breadth of EY s capabilities and global reach, and underpin our work with rigorous, evidence-based quantitative analysis and deep sector expertise. Visit our webpage to find out more.

Financial Modelling Training

Established over 20 years ago, the EY Business Modelling team has grown to become the largest team of dedicated financial modelling specialists in the UK. The EY Financial Modelling Training team specialises in providing courses that cover a range of different modelling disciplines, transaction areas and industry sectors. Our courses are delivered around the world by experienced financial modelling practitioners who also conduct modelling advisory work for our clients.

Related content

Business valuation

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Data science can be used to inform and optimise the markdown optimisation process such that inventory is managed whilst maximising margin.

Business valuation

You’re harnessing the power of R – but are you managing its risks?

The rising popularity of R follows a huge shift in the business intelligence and analytics market but with great power comes great responsibility. Find out more.

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Matrimonial Asset Valuation Services

We are proud to announce the launch of the Matrimonial Asset Valuation Services at EY with a cross service line effort of Expert Valuations, Tax and Forensics teams.

Business valuation

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We look at the Premier League s estimated economic contribution in the 2013/14 season just part of its, and its Clubs , overall contribution to the country.

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The economic impact of the Premier League

We look at the Premier League s estimated economic contribution in the 2013/14 season just part of its, and its Clubs , overall contribution to the country.

Contact us

Business valuationAdrian Nicholls

Head Partner – Valuation Business Modelling

+44 (0)20 7951 3853

Connect with us

Stay connected with us through social media, email alerts or webcasts.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst Young Global Limited, each of which is a separate legal entity. Ernst Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Tags : ,

Moneychimp: Stock Market Investing, Online Calculators, Valuation Models, and more, business valuation calculator.#Business #valuation

business valuation calculator

Business valuation calculator

Business valuation calculatorBusiness valuation calculatorBusiness valuation calculatorBusiness valuation calculatorBusiness valuation calculatorBusiness valuation calculatorBusiness valuation calculator

Business valuation calculator

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Business valuation calculator

Business valuation calculator

Business valuation calculator

Business valuation calculator

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Business valuation calculator

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Learn the logic of stock valuation with a discounted cash flows calculator. plus P/E, P/S and PEG ratios, CAPM, DDM . Buffett’s secret formula (?) . and a Grahamatron with Artificial Ben-telligence.

Business valuation calculator


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Valuation – Business Modelling – EY – Canada – EY, business valuation.#Business #valuation


Transaction Advisory Services

Business valuation

  • Share

Valuation & Business Modelling

How can we improve our forecast models?

Valuation

Transparent and robust valuations are required to support today s corporate transactions and meet important regulatory and accounting requirements. The process of assessing assets and liabilities is increasingly complex. Leading companies know that the knowledge of a designated Chartered Business Valuator can yield important benefits in their valuation reports.

Businesses both private and public, lenders and institutional investors often need to obtain valuations or fairness opinions to support major corporate transitions and decision-making. Acquisitions, divestitures, restructuring and supporting financial statement assertions are just some of the areas where valuations are an essential business requirement.

The opinion of an independent third party can also help you decide which route to take when dealing with relationships and transactions with minority shareholders, employee ownership and stock option arrangements, and litigation and shareholder disputes.

Our Valuation professionals apply a powerful combination of experience and technical skills to complex valuation situations, including:

  • Formal valuation opinions for compliance, regulatory and other purposes
  • Financial reporting valuations, including purchase price allocation, valuation impairment studies and venture investment valuation
  • Fairness opinions to assist boards of directors in meeting their fiduciary duties to shareholders and other stakeholders
  • Valuation analyses and estimates for strategic planning, corporate tax and transaction advice
  • Capital equipment valuation for financial reporting, transaction, taxation and insurance
  • Capital allocation and risk analyses, including developing dynamic discounted cash flow/real options models for investment decisions, risk analyses and project financing
  • Intangible valuations for financial reporting, corporate tax planning and strategic purposes
  • Litigation support services, including expert advice on valuation and damages, and providing expert reports to assist in resolving financial disputes

Business Modelling

Increasingly complex financial models underpin large and meaningful business decisions, but in many cases, these models simply fail to meet today s business standards for rigour and accuracy.

Our Business Modelling team has the experience to help mitigate the risks inherent in the use of financial models, the skills to augment your strategic planning and decision-making, and the independence to provide the objectivity crucial to successful business modelling.

Having developed our own proprietary model development methodology, backed by a proven track record in model reviews and unparalleled access to EY s global network of related model services, we customize our approach to your needs. What s more, we support your teams with the training, guidance and assistance they need to properly leverage financial models.

Our highly skilled Business Modelling team has the knowledge and experience to support your strategic decisions, operational performance and M A / private equity transactions. Our services include:

  • Model development: applying our unique methodology to develop comprehensive models that exemplify transparency, flexibility and robustness of design
  • Model review: assessing the integrity and robustness of your financial models to provide independent assurance that they are free of material errors
  • Simulation and decision models: employing simulation and decision models to understand opportunities and risks that are not readily apparent in more traditional analyses

Tags : ,

Business Valuation, Excel DCF Models, business valuation.#Business #valuation


business valuation

Business valuation

Business Valuation in Excel

Business valuation Business valuation involves the study of many aspects of a business, including anticipated revenues and expenses. Because cash flows extend over time, an Excel discounted cash flow (DCF) model can be a helpful tool.

A Discounted Cash Flow analysis for a business valuation requires the analyst to consider two components: (i) a projection of ongoing revenues and expenses of the foreseeable future; and, (ii) a determination of the discount rate to be used.

Ongoing Revenues and Expenses

Projecting a business expected ongoing revenues and expenses requires expertise in the business specific field. For example, a DCF analysis for purchasing an office tower requires input from commercial real estate specialists. Similarly, a DCF analysis of a proposed mine requires the involvement of geologists.

Discount Rate

Selecting the discount rate requires us to consider two components: (i) the cost of capital; and, (ii) the risk premium associated with the stream of projected net revenues.

Capital is a productive asset that commands a rate of return. If a business purchase is financed by debt, the cost of capital simply equals the carrying charges on the finance loan.

If the business purchase is financed by the owner’s equity, the relevant cost of capital would be the opportunity cost of the capital – the net income that the same capital would generate if committed to its next-best alternative.

The choice of discount rate must consider not only the owner s cost of capital, but also the risk of the business investment. Some types of investment are more risky than others. In the case of a riskier business, it is appropriate to include a higher discount rate.

Business Valuation Model in Excel

The Business Valuation Model projects the discounted present value of a future stream of expected revenues and expenses. The model requires the user to input a stream of anticipated revenues and expenses, as well as the discount rate to be used. The cumulative value of discounted revenue is shown in the far-right column.

Business valuation


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Free Small Business Valuation Calculator #online #business #directory


#business valuation calculator

#

Free Small Business Valuation Calculator. A Quick and Simple way to Value your Business online.

Ever wonder what your business is worth?

No need to spend time or money on a business valuation firm. Just enter in the information on our valuation spreadsheet and our software will calculate the value of your small business.

The formula we use is based on the Multiple of Earnings method which is most commonly used in small business valuation. The multiple is similar to using a discount cash flow, or capitalization rate used by top business valuation appraisers and top analysts. We�ve just simplified it for small business owners.

For a more personalized and in depth business valuation, we provide a free business evaluation and consultation! for local business owners who are thinking about selling their Business.

Disclaimer: This tool should only be used as a general indicator of value. There are other factors associated with the sale of a business that can impact the value of a business that only an experienced broker will be able to identify. Please contact us for a more personal evaluation of your business and for suggestions on how to prepare your business for the highest sale possible.


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