Business Valuation – Frequently Asked Questions

An estimate of market value based on cash flows, assets, risk and market evidence. Explore packages in Bisvalue valuation services.

Sales, acquisitions, fundraising, incentive plans, tax, disputes and strategy planning. Overview in our services.

Discounted Cash Flow (DCF), market multiples (comps) and asset-based methods. Intro in the Bisvalue valuation model.

Discounting future free cash flows using an appropriate cost of capital. How we apply it in the model.

When cash flows are forecastable and value drivers are clear. If unsure, contact Bisvalue.

Applying EV/EBITDA, EV/Revenue or P/E of comparable companies to your metrics. Framework in the model.

Multiples observed in comparable M&A deals, used as references. Context in the model.

Focuses on adjusted net assets; useful for capital-intensive or loss-making businesses. More in the model.

No. Professionals triangulate and weight methods. See reasoned ranges in Bisvalue reports.

Enterprise value includes net debt; equity value = EV − net debt (± adjustments). Basics in the blog.

EBITDA adjusted for non-recurring and non-operating items. Examples in the model.

A normal level is required to operate; deviations at closing often adjust price. Assumptions in each Bisvalue valuation.

To ensure comparability across accounting standards. Approach in the model.

Consistent treatment (often capitalised) for fair comparisons. Notes in the model.

Annualised level extrapolated from a recent period; beware of seasonality. More in the blog.

For material events or annually for planning and incentives. Quick updates via Bisvalue.

History, budget/forecast, customer/product data, contracts, cap table, KPIs. Checklist in our services.

Assets minus liabilities at market value. Where it fits in the model.

Value business units separately and add them up. Explanation in the model.

Only for early conversations; not for binding decisions. For robust analysis, order a report.

Weighted average cost of capital from debt and equity. Parameter logic in the Bisvalue model.

Higher rates/inflation increase discount rates and compress multiples. Market context in the blog.

A measure of market sensitivity used in the cost of equity. Usage in the model.

Government bonds in the relevant currency and maturity. Disclosed in each valuation.

Extra return for political/economic risks of a country or region. Integrated in the model.

Forecast and discount in the same currency with consistent assumptions. More in the blog.

It can affect discount rates, margins and demand. Considered in Bisvalue reports.

Private shares often trade at a discount for lower liquidity/exit options. Treatment in the model.

Control positions may earn a premium; minority stakes often carry discounts. Discussed in reports.

Intense rivalry compresses margins/multiples; moats support premiums. Strategy in the blog.

Pricing power and defensibility often translate to higher multiples. Drivers covered in services.

Use higher risk premia and wide scenarios; be cautious with multiples. For complex cases, Bisvalue Support.

Proven execution and good governance reduce risk and support premiums. Reflected in valuations.

Independent assessment of the quality and sustainability of earnings. In M&A, combine with a Bisvalue valuation.

More debt raises risk and cost of capital but can boost ROE; net debt bridges EV and equity. Adjusted in the model.

Poor data → poor valuations; robust datarooms and traceability are essential. Guidance via Contact.

Scale and lower unit costs can lift multiples. Practical takes in the blog.

Long-term growth rate beyond the explicit forecast; keep conservative and justified. Foundations in the model.

Typically 3–7 years depending on visibility and phase. Stated in each report.

Sensitivity tests single assumptions; scenarios weight full futures (base/bull/bear). Both are included in Bisvalue valuations.

Model NOPAT (after tax) and a realistic long-run tax rate. Assumptions disclosed in our reports.

Sustaining investment needed to maintain capacity. Placement in the model.

Use LTM/TTM and normalise outliers. Choices discussed on the blog.

Match business model, geography, size and growth. Logic in the model.

Use a basket of partially comparable peers and triangulate with DCF. Trade-offs in the model.

Identify/capitalise commitments for fair comparability. Adjustments in reports.

A target is agreed; deviations at closing adjust price. Mechanics in the model notes.

Contingent consideration tied to future performance that shares risk. For scenarios, use Bisvalue valuations.

Methods like relief-from-royalty or excess earnings for IP, brand and relationships. Treatment in reports.

Black–Scholes or binomial using volatility, term and rates. Parameters in the model.

Pre is before new capital; Post = Pre + new money. Concepts covered in the blog.

Preferences (liquidation, dividends) affect ordinary equity value. Reflected in reports.

High concentration raises risk and can compress multiples. Treatment in the model.

Transparency improves credibility and follow-up. Disclosure structure in our valuations.

Valuation is an interval, not a single point. Ranges motivated in Bisvalue reports.

Normalise history and use scenarios; don’t over-credit one-offs. Examples on the blog.

Weight by probability and quality before recognising value. Criteria in the model.

Focus on revenue/gross-profit multiples, unit economics and path to cash; triangulate with DCF. Patterns on the blog.

Simpler models with wider ranges; owner/customer dependence weighs more. For practical ranges, request a valuation.

Transactions, incentives, minority dealings, disputes or regulated processes. Start via Contact.

EV/Revenue, Rule of 40, churn/LTV and DCF; net revenue retention is key. Guides on the blog.

Gross margin, logistics, inventory turns and loyalty; profitability drives multiples. Framework in the model.

Utilisation, rate cards, people risk and share of recurring revenue. Reflected in reports.

Capital intensity, order book, margin cycles and pricing power. More in the model.

GMV, take rate, network effects and retention; often revenue/GP multiples. Guides on the blog.

Asset-light models often get higher multiples; asset-heavy lean more on substance. Trade-offs in reports.

Blend revenue/GP multiples with DCF and cohort analysis. Investor-ready ranges via Bisvalue.

NAV approach with discounts/premiums by quality and liquidity. Framework in the model.

Focus on going-concern, future cash generation and financing; asset-based methods may dominate. Edge cases with Support.

Royalty benchmarks, protection strength and monetisation paths. Treatment in reports.

Use TTM and explicit seasonal profiles; avoid over-valuing peaks. Tips on the blog.

Longer terms and low churn reduce risk and support higher multiples. Contract quality reflected in valuations.

Single-source raises risk; alternatives and strong contracts mitigate. Treatment in the model.

Project margin, backlog, conversion and cash cycle drive value. Weighting rules in the model.

Network effects, developer community and partnerships; premium if durable. Strategy angles on the blog.

Phased entries/R&D where managerial flexibility has option value. Consult Bisvalue.

Stronger pricing power and higher gross margin tend to support higher multiples. Cases on the blog.

Age, turns and obsolescence shape invested capital and risk. Lenses in the model.

Credit visibility, mix and delivery probability; be conservative on early orders. Treatment in reports.

Financial, legal, technical and commercial reviews can adjust price, terms or structure. Combine with a Bisvalue valuation.

An independent view on whether a proposed price is financially fair. Start via Contact.

They share risk by linking part of price to future performance. Alternatives modelled in reports.

A target is agreed; deviation adjusts the purchase price. Mechanics in the model.

Identify and adjust EV/cash flow for real commitments. Disclosed in each valuation.

Timing and conditions influence risk, synergies and deal certainty. For regulated scenarios, Support.

It speeds reviews, reduces risk premia and builds trust. Checklist via Contact.

Often discounted for lower control and liquidity. Treatment in the model.

Indicative is non-binding and information-limited; binding follows due diligence and agreements. Process on the blog.

Sector/region experience, independence and clear methodology. For valuation, use Bisvalue.

Methods, assumptions, parameters, scenarios, sources and limitations. Structure in Bisvalue services.

At least annually or at material changes. Bisvalue provides fast periodic updates.

Separate interests, disclose conflicts and apply consistent methods. Approach at About.

Yes; comparability requires cross-standard adjustments. Alignment in the model.

Show ranges, key assumptions and uncertainties; avoid false precision. Tips on the blog.

Over-optimistic forecasts, inconsistent assumptions, weak data and single-method bias. Bisvalue mitigates these in reports.

Better ESG data can reduce cost of capital and attract investors. Practical angles on the blog.

Disclose separately and assess durability; avoid over-valuing temporary support. Treatment in reports.

Independent estimate for shares/options under local rules. Start via Contact.

Roll LTM, refresh WACC/multiples and market data regularly. Annual reviews via Bisvalue.

Data sources, workbooks, parameter rationale and approvals. Audit-friendly pack in services.

Intra-group pricing affects profitability and comparables. Discuss via Contact.

Transactions, restructurings, stock option grants or cross-border moves often need support. We prepare tax-ready reports.

Versioning, peer review, parameter dashboards and periodic back-testing. Method in the model.

Separate from stand-alone value with realistic timing and costs. Synergy value shown in reports.

Use clear ranges, scenario narratives and key sensitivities. Examples on the blog.

Ranges are safer; SMEs have higher variance. Bisvalue provides decision-ready ranges.

Track synergy capture, margin uplift and capital efficiency vs the deal model. KPI bridges on the blog.

Independent oversight, consistent methods, strong data and periodic re-valuations. Set up your process with Bisvalue.

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