A business valuation rarely yields a single “correct” number. The value depends on assumptions about growth, margins, investments, and the cost of capital. Small changes can make a big difference. That’s why consultants use scenarios and sensitivity analyses: methods to show how the value changes under different circumstances. In this blog, you’ll learn how that works. … Read more
The value of a business may sometimes seem like an objective number, but in reality, it’s often a matter of assumptions, perceptions, and emotions. Entrepreneurs regularly make mistakes in this regard that lead to disappointment when selling or investing. In this blog, you’ll learn about the most common pitfalls and how to avoid them. Emotional Overvaluation Many entrepreneurs … Read more
You might think that once the buyer and seller agree on the value of a company, the deal is done. In reality, that’s when the real work begins. The deal mechanisms and terms determine how, when, and under what circumstances the money will actually be paid. In this blog, you’ll learn about the different mechanisms and … Read more
The value of a company may seem like a fixed amount, but in reality, it depends heavily on the context. A strategic buyer sees different benefits than a financial investor, and in a merger, the exchange ratio plays a role. It also makes a difference whether someone acquires a majority or minority stake. In this blog, you’ll read … Read more
The value of a company has long since ceased to be determined solely by profits and cash flows. Buyers and investors are increasingly looking at ESG factors (Environmental, Social, Governance) and intangible assets such as brand, culture, and customer relationships. While these elements can sometimes be difficult to quantify, they can certainly increase or decrease a company’s valuation. Why ESG matters … Read more
Company valuations often revolve around multiples. But not every industry is viewed through the same lens. A software company might sell for 8x EBITDA, while a retailer would be lucky to get 4x. The difference lies in risk, growth potential, and industry dynamics. In this blog, you’ll learn why multiples vary by industry and how to use benchmarks wisely. Why … Read more
A company’s value doesn’t depend solely on the numbers in the books. Economic conditions also play a role. Rising interest rates, high inflation, or a recession can drive down a company’s valuation, while favorable market conditions, on the other hand, lead to higher prices. In this blog, you’ll learn how interest rates, inflation, and economic conditions affect company valuations and why timing … Read more
A valuation often yields a nice number: the enterprise value. But that’s not the same as the price you, as the seller, will ultimately receive. To get from value to price, the “price bridge” is established. Working capital and net debt play a central role in this process. In this blog, you’ll learn how it works … Read more
When valuing a company using the discounted cash flow (DCF) method, there are two key questions: How much money will the company generate in the future, and how much is that worth today? To answer the second question, you use the discount rate, better known as the WACC. In this blog post, you’ll learn what WACC is, how to calculate it, and … Read more
Many valuation methods use EBITDA as a basis. However, the profit reported in your financial statements often does not accurately reflect your company’s sustainable earning power. That is why EBITDA is normalized—adjusted for items that are not representative. In this blog, you’ll learn why this is necessary, how it works, and what buyers look for. What … Read more
