Our last metric is valuation of your business. 

Capitalisation of Earnings Basis

Whilst there is no single way in which a business can be measured and valuations are subjective, we use what is called the ‘capitalisation of earnings’ method basis to provide a valuation guideline. 

The valuation of a business is a complex and involved process involving lots of information gathering and analysis as every business is different and will have unique factors which need to be taken into account in order to arrive at a fair valuation. 

Whilst the true valuation of a business is what the parties concerned ultimately agree on, our methodology provides a basis to begin negotiation.

As we do not have the detailed information to hand, we use the capitalisation of earnings basis to determine a valuation. 

The basis of using this method is the value of a profitable concern is directly related to its profits being generated rather than the replacement value of its assets and liabilities.

FinGenie will show how changes we make can make an impact on the business valuation.

How does this help the Business Owner / Manager?

This helps to give the manager a starting point for any sale negotiations. It is also a useful indicator of the impact that certain decisions will have made on the value of the business. Ideally we want to see this growing on a monthly basis.