Business Valuation Service
Our approach to business valuations
Many valuation firms rely on standardized templates and automated reports, often filled with stock phrases, generic charts, and formulaic analysis. These reports may appear insightful but frequently lack the depth and substance needed for truly informed decision-making. Beneath the surface is a one-size-fits-all methodology that fails to reflect the unique characteristics of each business. This oversimplified approach can lead to costly misjudgments, especially in critical moments like negotiations, transactions, or legal disputes.
Since business valuations service is the core of our business, we better do it right! There are several methods that are commonly applied to value a business. However, no single method tells the whole story. For that reason, we use a combination of techniques—most commonly the Discounted Cash Flow (DCF) method and valuation multiples—to triangulate a well-supported, competitive valuation. The net asset approach is suitable in specific cases, such as asset-heavy businesses or companies in liquidation or distress, where value lies in tangible assets rather than future earnings. As it ignores growth and income potential, the net asset approach should be used selectively. When used together, these approaches help ensure the valuation stands up to scrutiny from both buyers and sellers.
Understanding how DCFs and multiples differ in practice
DCF valuations are based on detailed short-term forecasts and long-term projections. These future cash flows are discounted back to present value, factoring in inflation, risk, and opportunity cost. DCFs can also account for expected synergies in an acquisition, which is why they’re often used by strategic buyers. Higher expected growth drives higher DCF values—future cash flows are worth more today if they grow rapidly. But DCFs, when used alone, sometimes lack real-world context.
That’s where multiples come in. A multiple expresses value as a factor of a company’s earnings, usually EBITDA. For example, if a company earns $2 million and is valued at 8x EBITDA, its Enterprise Value is $16 million. But determining the right multiple involves more than just profits—it also reflects market dynamics, the company’s growth prospects, management quality, and recent M&A activity. It’s a relative measure grounded in actual market behavior. Growth is a key factor here too. Across industries, higher growth typically commands higher multiples. A company valued at 8x EBITDA with no growth implies an 8-year payback period. A high-growth business could return that investment in just a few years, justifying a premium.
The best valuations combine multiple perspectives
While DCFs quantify growth, they may miss softer or market-driven factors. Multiples bring that context but are more subjective. That’s why experienced investors and advisors rely on both methods for a well-rounded view. We will guide you through the process—highlighting what drives value in your business and helping you present it in the best possible light to achieve the optimal outcome.