News & Events
A Different Look At Valuing Your Company
ENLIGN DEAL TEAM | 06/27/2012
- Are there cost savings after purchase?
- Are there significant capital expenditures pending?
- Is there synergy with the seller?
- Is it perceived the integration will go smoothly?
- Are there substantial cross-selling possibilities?
- Will the cultures blend?
The Financials: By training and education, many business appraisers emphasize the numbers. They will look at the past, current and future numbers. They will consider all the basic financial figures such as:
- Growth rate
- Return on investment
- Gross profit percentage
- EBITDA percentage
- Industry metrics
- Debt to net worth
- Book value
Fundamentals: Business appraisers should also consider the company’s history, its management, products, distribution, etc. The following should also be seriously considered: multi-products, different markets, wide distribution and the quality of management.
Value Drivers: These are important business elements that are most often ignored or completely overlooked by business appraisers. However, they are very important to a potential buyer. • product differentiation • defensible position • technology • dominant market share • well-known brand(s) • cost advantage • proprietary customer