A well-crafted business forecast is the backbone of any credible valuation
Understanding the value of your business is crucial for increasing its value and for determining the right price when buying or selling.
Approach
How our valuation approach works?
Determine the discount rate
A high-level estimation of the discount rate will based on your currency, country, and industry
Estimate the exit value
The exit value of your business is estimated by either an exit multiple or a perpetuity growth model
Compute the valuation
The valuation is subsequently computed using the explicit cash flow forecast, exit value, timing of cash flows and the discount rate
Discounted cash flow valuation
The discounted cash flow (DCF) valuation is the cornerstone of valuation and it relies heavily on a solid business forecast. It estimates intrinsic value by adjusting expected cash flows for inflation and risk.
![Screenshot of DCF valuation](/_next/image?url=%2Fimages%2Fscreenshots%2Fvaluation%2FdcfValuation.png&w=3840&q=75)
Discount rate estimation
A weighted average cost of capital (WACC) is estimated by analyzing the relative costs of equity and debt, using market data to capture investors' risk and return expectations
![Screenshot of discount rate estimation](/_next/image?url=%2Fimages%2Fscreenshots%2Fvaluation%2FdiscountRate.png&w=3840&q=75)
Exit value
Since most businesses are expected to operate beyond the explicit forecast period - it's essential to estimate the exit value. This can be done using an exit multiple or a perpetuity growth model
![Screenshot of exit value](/_next/image?url=%2Fimages%2Fscreenshots%2Fvaluation%2FexitValue.png&w=3840&q=75)