1. Does the Value Opportunity Profile® give me a certified valuation?
No. The Value Opportunity Profile® calculates the Intrinsic Value of your company, which is intended to be used as a baseline for creating and measuring future value. You’ll then receive a customized Roadmap for Maximizing Value as your tool to achieve that future value.
2. Intrinsic Value? What does intrinsic value mean?
Intrinsic Value is arguably the best measure of the value of your business based on its own merits rather than based on what other “comparable companies” are being sold for. It is measured by the historical and projected cash flows that have been generated, or are projected to be generated by your company in the future, translated to today’s value, based on a risk-adjusted conversion factor.
3. Why is intrinsic value used instead of industry multiples?
There is a link below to an article that explains exactly what is wrong with industry multiples. However, the short answer is that intrinsic value is simply a better method of determining the value of a given business. If you go to sell your company, you may drive a higher or lower price depending on many factors that include your negotiation expertise. However, the intrinsic value will remain the same regardless of the price for which it is sold. Please click here to view the article for more information.
4. Is the Value Opportunity Profile® a replacement for a certified valuation?
No. The Value Opportunity Profile® is a forward-looking process designed to help you maximize the future value of your company. It is most appropriate in situations where the focus is on maximizing future value. Certified valuations provide a historical viewpoint of the value of a business, but are not designed to help create future value. Certified valuations are most appropriate for situations such as estate tax returns, fairness opinions, shareholder disputes, and specialized financial reporting.
5. Could I convert the results of the Value Opportunity Profile® to a certified valuation?
Much of the work that goes into the Value Opportunity Profile® could be transferrable to a certified valuation IF the measurement date of the certified valuation corresponds to the timeframe in which the Value Opportunity Profile® was conducted. However, it would be more prudent to determine at the outset whether a certified valuation is required, as the two processes have different focuses.
6. How do you know if my answers to the questionnaire are correct?
The accuracy of the results of the Value Opportunity Profile® is only as good as the accuracy of the answers and information you provide. Before your answers get processed, you will be asked to represent that you have answered the questionnaire and completed the financial table to the best of your knowledge and belief, and that you know of no other factors which would logically impact the results. If we assist you in preparing the questionnaire and financial table, we will guide you through the answer process to help you along.