Business valuation, whilst based on many different formulas and calculations, ultimately comes back to key factors – risk and reward :
Business risk analysis is a vital part of any valuation and should review both financial and non-financial performance and risk areas. The inherent risk in any business (and there is no business without any risk) should be constantly reviewed and managed – in valuation terms the higher the risk the lower the value.
Reward in business valuation can be delivered in two methods firstly income (the return delivered by the business) and secondly growth in equity value ( capital growth ).
Balancing the risk and reward is ultimately what the valuation comes back to -the higher the risk higher the reward needs to be in order to make the business investment viable. Businesses that deliver consistent cash flows with low risk will inevitably have a higher business valuation.
Business of Adding Value
The key to business success may be asking “Would you like fries with that?” Either find the fries in your business or find an exclusive niche in the marketplace. At either end of the Value Spectrum sits profit and success. Story by Craig West…
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The Value Spectrum
All businesses sit somewhere on this spectrum and maximising the value of your business depends upon your ability to recognise where it currently sits and how to improve its position. This article focuses on this model and how to use it to MAXIMISE THE VALUE OF YOUR BUSINESS!…
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Public vs Private business valuations
There are a number of factors that are considered differently in the valuation of privately held vs. public ( ASX listed ) companies—even those that are in the same industry—making a direct comparison for valuation purposes difficult. In some cases, it’s like comparing apples to oranges. Following is a list of some of the issues that may result in differences between the valuations of public and private businesses:…
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Business Valuation
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