WEBINARBusiness Valuation

WHAT IS PROVAMARK?

Business Financial Analysis Platform

Financial Ratio Analysis

Financial Projections

Business Advisors:Consult multiple companies on all stages of financial analysis and due-diligence

BenchmarkingScoring

Business Valuation

Due Diligence

Spreading Financials Automatic calculation of key financial measures:Cash Flow, EBITDA, SDE

Easy, Quick setup of Projection ScenariosModel debtCompare multiple scenarios

Create, manage, fulfill and share:Document ListsQuestionnaires

4 Valuation MethodsValuation Range

CPA AND VALUATION?Valuation starts with accounting statementsValuation useless without accurate accounting

Expand Consulting Relationship

WHY VALUATIONBusiness Sale or Merger

Shareholder/Partnership DisputesMatrimonial Disputes

Estate Planning

Business ReorganizationBusiness Interruption ClaimsEmployee Stock Plans

Business Financing

Strategic Planning

VALUATION METHODSCorporate Finance Institute (CFI)

VALUATION METHODS

Market Approach

Cost Approach

Discounted Cash Flows

Market Multiples

Balance Sheet

DCF

Dividend Discount

AvailableOn ProvamarkMethod

MULTIPLES

Financial Base

MultipleLow - High

Business ValueLow - High

=

Multiples approach

Select appropriate base measure for industry

Select appropriate valuation multiple rangeDetermine if business deserves multiple range above or below industry

ASSET VALUATIONFixed Assets and Equipment

Liquid and Current AssetsPayout value

Collection probability for receivables

Sale conversion probability for inventories

Replacement valueAppraisal value, depreciated book value, auction/liquidation value

DCF VALUATION?Value of a business today is the value of all the future cash the business will generate.

= + + …Cash Flow

Year 1Cash Flow

Year 2

DIVIDEND DISCOUNTMODEL

Assume business pays cash flows out as dividends into infinite future.

+ + …Dividend

Year 1Dividend

Year 2Dividend

Year 3

=Value today of all the future dividend payments

PROJECTED CASH FLOWSMODEL

+ProjectedCash Flow

Year 1

= Value today ofprojected cash flows + terminal value

TerminalValue

ProjectedCash Flow

Year 2

ProjectedCash Flow

Year 3

+ProjectedCash Flow

Year 4

+ProjectedCash Flow

Year 5

+ +

Project expected business cash flows for reasonable period 3-5-10 years.

Value all cash flows after projection period together - Terminal Value.

CASH FLOWS

Measures and Proxies

Revenues, Net Income

EBITDA/EBIT

Free Cash Flow: Levered/Unlevered

Seller’s Discretionary Earnings

SMALL BUSINESSESPrivate often family owned

Owner/Family operated

Owner/Family expenses mixed with business expenses

Seller’s Discretionary Earnings (SDE)

SELLER’S DISCRETIONARY EARNINGS

Seller’s Discretionary

Earnings

Pretax and pre-interest profits before non-cash expenses(EBITDA)

Non-recurring/Extraordinary Expenses

Expenses/Income not related to business

HOW CAN PROVAMARK HELP?

Old way:

Complex Excel models

Valuation software for valuation experts

Expensive, static, printed reports

HOW CAN PROVAMARK HELP?

Online, Easy Setup, Easy to Follow

Work with multiple clients and stakeholders

Supporting Services

Automatic Spreading of FinancialsFinancial Ratio Benchmarking and Scoring

Financial Projections

Platform Demo

QUESTIONS

THANK YOU!!Next StepsVisit Us:https://provamark.com

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