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    Business Valuation

    Business valuation is working out what a company is worth, using more than one method, for a particular decision such as a sale, a purchase or a fundraise.

    A volatile earnings profile is an argument for normalising earnings, not for abandoning them. (read where we wrote it)

    3Methods we set against each other, once the earnings are clean

    Where does a valuation get its number?

    From the earnings first. Every method multiplies or discounts a figure, so a figure a buyer will not accept spoils all three. Where the methods disagree, the disagreement is the finding.

    The bigger the circle, the more of the number is decided there.

    1. Clean earnings

      Owner expenses, one-off items and related-party dealings at non-market prices taken out, so every method starts from earnings a buyer accepts.

      When a revenue multiple fits, and when it does not

    2. Comparable transactions

      What similar companies sold for. The nearest evidence of a price, though each of those deals had its own buyer and its own reasons.

    3. Comparable listed companies

      What similar listed companies trade at. A private company rarely matches them closely, so the differences are set out.

    4. Discounted cash flow

      What the future cash flows are worth today. It shows which few assumptions move the number most.

    5. The buyer test

      The number that counts is what a particular buyer will pay for. A company in the same business may pay for savings only it can make.

      Sell-Side M&A

    6. The signature

      Where a law names who must sign, a registered professional we work with signs the report, on the same numbers.

      FEMA, RBI & Corporate

    What does a valuation from SRF cover?

    The business valued three ways, for the decision in front of you, and the statutory report where a law needs one.

    How we work

    Where next in Business Valuation?

    Business Valuation pages