ValuAdder Business Valuation Blog

One of the greatest strengths of ValuAdder business valuation software is that it evolves continuously to respond to our customer needs. Our latest product release, ValuAdder V4.0.5 is no exception – by popular demand we have added the following new features:

  1. Business valuation Rules of Thumb Tab now provides the standard SIC and NAICS industry classification codes for all 402 industries.
  2. Multiple of Discretionary Earnings business valuation result reports the overall earnings multiplier, in addition to the 14 valuation factors.
  3. Financial recasting worksheets now let you determine the company-specific risk premium from 10 key risk factors.

As before, ValuAdder Rules of Thumb let you locate the industry of interest three ways:

  • By name: with all industries arranged in alphabetic order.
  • By industry group: so you can see all related business types for quick comparison.
  • By direct search: typing just part of the business description instantly produces all matches. You can quickly narrow down your choices by providing a more specific business description, e.g. specialty retail instead of retail.

Business market value comparison – quick and accurate

Once you have found the industry to do your market comparison, click on the Info button to see the actual SIC and NAICS industry classification codes. Make sure you are using the right industry for your market comparisons!

Business valuation as multiple of its earnings

Multiple of Discretionary Earnings business valuation automatically creates the earnings multiplier based on your assessment of the business across 14 key financial and operational performance factors.

With ValuAdder V4.0.5 your business valuation result now also displays the earnings multiplier value. This important result is also reported in the ValuAdder Earnings Multiple report. If you are creating a business valuation report, include this important value along with your valuation factors.

Assess company-specific risk for accurate business appraisal

If you are using the famous Discounted Cash Flow method for valuing a business, you will find that the accuracy of your business valuation results depends upon the discount rate you use. One of the most important and challenging parts is how to figure out the company-specific risk.

ValuAdder V4.0.5 worksheets introduce a build-up procedure to determine the company-specific risk.

Now you can estimate this important value easily – by ranking the business across 10 key risk factors:

  • Earnings stability
  • Financial leverage risk
  • Operating risk factors
  • Profitability
  • Customer concentration
  • Product concentration
  • Market concentration
  • Competitive position
  • Quality of the management
  • Skill of employees

The result? Quite simply, the most systematic and accurate way to value your business based on the two essential parameters:

  1. Business earnings
  2. Business risk profile.
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