Obtain Financial Information
Last 3 years profit and loss statements and balance sheets.
Last 3 years cash flow.
Details of all major assets.
Details of all major liabilities, borrowings, creditors, tax, leases, superannuation and other employee entitlements.
Management accounts if any.
Budgets and performance to past budgets.
Any profit/cash flow projections.
Details of any contingent liabilities.
Obtain Market Information
Market this business is in.
Competitors - check who they are and how many.
Check any barriers to entry.
Spread of customers.
Spread of suppliers.
Market share the business has.
Information Analysis
Type of income.
Profit margins.
Business stability.
Other Factors Affecting Value
Skills required of management and staff.
Quality of management.
Industry lifecycle.
Reliance on owner operator.
Selecting a Valuation Method
Capitalisation of earnings.
Estimating future cash flows and applying a discount for the time value of money and degree of risk.
A notional realisation of the assets of the business less the liabilities associated with them.

Business Valuation Checklist

Related Checklist Templates: