Comparable Company Analysis

Valuation – Comparable Company Analysis vs DCF

Company Trading Multiples vs. Comparable Transaction Analysis vs. DCF. There are market based valuation approaches such as examining public company trading multiples and comparable transaction analyses, and there are company specific cashflow and earnings based methodologies such as Discounted Cashflow (DCF) analysis.  In this post we review both market based approaches and company forecast analysis.…

Revenue Quality

Revenue Quality: What Does it Really Mean?

Revenue Quality is an area of focus for buyers and venture capital/private equity investors.  High revenue quality companies are valued higher than low quality revenue companies.  But what does this really mean and why is this? It is simply a question of risk.  High quality revenues reduce risk and therefore result in a higher valuation.…

Normalization Adjustments

EBITDA: How to define and measure

EBITDA Normalization Adjustments: Where do you stop? For public companies the most noted multiple is that of after tax net income (a PE multiple).  For early stage companies it is quite often a multiple of revenues because, either they are not profitable or, they are in a high growth phase, where profit levels are depressed…

value

What Drives a Strong Value for your Business?

How do you Realize Full Value for your Business? Like any good question, there is more than one answer to this question. In fact, there are two. The first answer concerns the business itself, while the second answer concerns the sale process. A higher EBITDA multiple is paid for lower risk, but, the biggest driver in…

Situations to Avoid When Selling Your Business

12 Mistakes to Avoid When Selling Your Business

12 Mistakes to Avoid When Selling Your Private Business The following illustrates 12 scenarios to avoid when selling your business and discusses the main impediments to securing exceptional value for small private companies. A Must Sell Situation Selling on strength should be your goal but be mindful that the selling window can close anytime.  If…