A well-structured Business Valuation Report Template Worksheet should include the following key elements:
Valuation Modeling in Excel – Example, How to Use, Why
1. Company Information
Company Name: The legal name of the business.
Date of Valuation: The specific date on which the valuation is being conducted.
Industry: The industry or sector in which the company operates.
Location: The geographical location of the company’s headquarters or primary operations.
2. Valuation Methodology
Method Selected: Clearly state the valuation method chosen (e.g., asset-based, market-based, income-based).
Rationale: Explain the reasons for selecting this particular method, considering the company’s specific characteristics and industry norms.
3. Financial Data
Income Statement: Provide a detailed income statement for the past three years, including revenue, expenses, and net income.
Balance Sheet: Present a comprehensive balance sheet for the same period, showing assets, liabilities, and equity.
Cash Flow Statement: Include a cash flow statement to analyze the company’s cash inflows and outflows.
Other Financial Metrics: Consider adding relevant financial ratios (e.g., liquidity, profitability, solvency) to provide additional insights.
4. Asset Valuation
Tangible Assets: List and value all tangible assets, such as property, plant, and equipment.
Intangible Assets: Identify and assess the value of intangible assets, including patents, trademarks, and goodwill.
Working Capital: Calculate the value of working capital by subtracting current liabilities from current assets.
5. Market Analysis
Comparable Companies: Identify publicly traded companies that are similar to the subject company in terms of industry, size, and financial performance.
Market Multiples: Calculate relevant market multiples (e.g., price-to-earnings ratio, price-to-sales ratio) for the comparable companies.
Valuation Based on Market Multiples: Apply the calculated market multiples to the subject company’s financial data to determine its value.
Projected Cash Flows: Forecast future cash flows based on the company’s historical performance, industry trends, and economic conditions.
Discount Rate: Determine the appropriate discount rate to reflect the risk associated with the projected cash flows.
Valuation Based on Discounted Cash Flows: Calculate the present value of the projected cash flows using the discount rate.
7. Conclusion
Valuation Estimate: Summarize the final valuation estimate based on the different approaches used.
Sensitivity Analysis: Conduct a sensitivity analysis to assess how changes in key assumptions (e.g., revenue growth, discount rate) would impact the valuation.
Limitations and Considerations: Highlight any limitations or uncertainties that may affect the accuracy of the valuation.
Design Elements for Professionalism and Trust
Clear and Concise Language: Use simple, straightforward language that is easy to understand for both financial experts and non-specialists.
Consistent Formatting: Maintain consistent formatting throughout the worksheet, including font size, spacing, and headings.
Professional Layout: Choose a clean and professional layout that enhances readability and visual appeal.
Use of Tables and Charts: Employ tables and charts to present complex data in a clear and concise manner.
Footnotes and References: Cite any sources or references used for data or information.
By incorporating these essential components and design elements, you can create a professional and informative Business Valuation Report Template Worksheet that effectively communicates the value of a company.