Business Valuation

Determining the value of a business is required for buying, selling, establishing or financing a business. From an investment perspective a business is simply an asset the value of which is determined by its future returns (profits).

You can quickly develop a business valuation using our Business Performance Analysis Modules.



A Business Valuation is a calculation of the value of a business. This value is effectively the price a business could sell for or the maximum amount of capital that should be expended in setting up a business.




A justifiable Business Valuation is the key negotiating tool when buying or selling a business. Without this there is no compelling logic behind the investment.

Using a business forecast that considers the dynamic environment in which the business operates and the potential for developing future opportunities is the basis of a verifiable business valuation. Applying Sensitivity Analysis allows a range of scenarios and corresponding valuations to be analyzed.

In essence a business valuation is the maximum amount of money that can be invested in a business while ensuring the required return on investment is achieved.




Business Valuation methods include Industry Multiples (ie revenue times a multiple), past market prices, asset based valuations, and a range of return on investment approaches.

When considering the business return (profit) as an income stream from an investment (the amount invested in the business) the Return on Investment approach is most suited and widely applied. This approach considers the specific business performance. Using the Return on Investment approach requires a business forecast to determine future business returns. If this forecast applies market knowledge and allows business potential to be quantified a solid basis for valuation is provided.

Our Business Performance Analysis Modules apply this approach. You can review them and determine a Business Valuation here.