Financial Valuations
The Questions Everyone Has:
So…what is my company worth? What is that patent worth? What is that customer relationship worth?
These are the kinds of questions that must be answered in business. There are plenty of silly and exotic ways to try to come up with an answer. Most of them are total baloney designed to obfuscate rather than enlighten
Our Approach:
We approach every one of these questions the same way. It boils down to:
- How much money can it make?
- When will we make that money
- How sure are we that we will make that money?
We ignore fancy models and dive into an estimated cash flow over a reasonable time horizon. We then calculate an Internal Rate of Return (IRR). And finally, we look at that return, the fuzziness of our estimates, the general risk of the marketplace and try to decide if that IRR matches the appetite for taking the risk.
The art is not in fancy post estimate gyrations but in applying discipline, objectivity, and subject matter knowledge to the estimates. The IRR calculation considers the time value of money and the uneven flow of cash. Setting a minimum IRR is where the risk on the cash flow projections are balanced against the risk appetite of the investor. This is where the real discussion will be. This is where the real discussion should be.
What We Offer:
Free 30 Minute Consultation/Inquiry Meeting
We look forward to assisting you with your financial valuation needs. Please click the sign up button below to schedule your free 30 minute consultation call. We would love to hear about your business and ways we can assist you moving forward. If you are looking to connect with a member of the CC4ICC team to ask general questions, feel free to signup for a call using the same link below.
