How to determine Beta in a business valuation

2023-03-02T09:07:03+02:002 March 2023|

The weighted average cost of capital (WACC) is a crucial component in determining the valuation of a company. The WACC represents the average cost of the various sources of capital (debt, equity, and others) that a company raises to finance its operations. When valuing a private company, business valuers usually face the challenge of determining the

Know your terms: business valuation versus business evaluation

2023-10-30T14:42:23+02:0021 February 2023|

The terms "business valuation" and "business evaluation" are frequently employed interchangeably, but they have significant dissimilarities that are worth comprehending. A business valuation involves determining the financial worth of a company. It is a quantifiable analysis that aims to estimate the value of the business considering various financial and non-financial elements, such as profits, liabilities, market

Calculate synergies from a merger

2023-10-30T14:42:29+02:009 February 2023|

The DCF (Discounted Cash Flow) valuation is a widely used financial tool to determine the present value of a company's future cash flows. It's commonly used in mergers and acquisitions to assess the expected financial benefits of the deal, including the synergies that would result from combining two companies. Synergies refer to the benefits of combining

Know your terms: Business Valuation vs Business Appraisal

2023-10-30T14:42:35+02:006 February 2023|

When assessing the Worth of a business, two terms often used interchangeably are "business valuation" and "business appraisal". According to the Merriam-Webster dictionary, the definition of "business valuation" is "the act or process of determining the value of a business or of a business interest." On the other hand, "business appraisal" is defined as "the act

Accountants: Are you a value builder or a scorekeeper?

2023-10-30T14:42:41+02:009 November 2022|

Many accountants undertake only annual accounting assignments, while others also compile monthly management accounts. Chances are good that there is always an element of consulting involved, whether it be tax consulting annually, monthly or on an ad-hoc basis. When you compile monthly management accounts, you may be more closely involved with critical business decisions. Are you

How do rising and falling interest rates affect a business valuation?

2022-03-31T14:47:48+02:0031 March 2022|

A topical issue for investors right now is the fact that stock prices are affected due to a hike in interest rates. As we currently find ourselves in a rising interest rate cycle, it is critical to consider the effect of interest rate changes in a theoretical and quantitative sense, as opposed to the market sentiment.

How is risk applied in a business valuation?

2023-10-30T14:42:45+02:0023 February 2022|

A previous article explored the relationship between risk and required returns, specifically in the context of a business valuation, highlighting the inverse correlation between risk and business value. But how is this risk quantified and applied in a business valuation? This is subject to the valuation method. Allow us to explain. The enterprise value (EV) calculated

How do risk and return work hand in glove in a business valuation?

2023-10-30T14:42:51+02:0013 January 2022|

The cliché: ‘the higher the risk, the higher the return,’ is technically not true, because the higher your risk, the higher your chances of investment failure. What the saying should be instead, is; ‘the higher the risk, the higher the demanded returns should be.’ The rationale for this is that the higher returns for successful riskier

How do I best budget and forecast to achieve maximum shareholder value?

2023-10-30T14:42:56+02:006 December 2021|

Gearing up towards the end of the year or financial year-end, you are most likely busy compiling your business strategy, budgets and forecasts for the year that lies ahead. But, are you truly taking the most critical objective of most profit-driven businesses into consideration - which is to build maximum shareholder value? We address some of

Where does the balance sheet fit into a valuation?

2022-03-24T12:05:49+02:0026 November 2021|

The balance sheet is often overlooked as a material component of the enterprise value (EV) and the equity value. It is also a misconception that it is irrelevant when determining the value of a business, based on earnings or future cash flows. This article addresses the relevance of the balance sheet when conducting business valuations. Plus,

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