Computerized Investing > May 14, 2011

Business Valuation Model for Excel

| | | Add your comment! | A A   Reset

The Business Valuation Model, created by the Bizpep Group, is designed to provide an efficient and effective means of assessing the value of a business. This model opens up in an Excel format where you can combine current financial statement data with your own subjective views of the company to generate forecasted valuation numbers.

After opening the program, you’ll notice that the valuation model includes several tabs at the bottom. The second tab is the input tab, where most of your figures will be keyed in. In the input tab, the current data section provides users with the ability to enter appropriate business financial data, starting with business revenue. Furthermore, variable costs (such as materials and supplies, labor, and marketing), as well as fixed costs (such as location, administration, and interest), are all customizable.

Once they have finished with the current data section, users can customize the indicators used to forecast data for the next three years. The indicators that users are able to provide include level of competition, market strength, labor costs, and interest rates. These indicators use 100% as the base case, or no change. For example, the figures provided for the level of competition category for the next three years could be 105%, 100% and 95%. This would represent that the user believes there will be a 5% increase in competition for the first year, no change in competition for the second year, and a 5% decrease in competition for the third year.

In the valuation data area, the final section of the input tab, users can specify other key figures such as replacement value of business assets, market value of property, and amount financed.

Once you are satisfied with your inputs, you can move on to the next few tabs. The sensitivity analysis tab allows users to define a percentage improvement and decline of relevant indicators. An improvement in indicators represents the optimistic case, while a decline represents the pessimistic case. Business revenue, operating surprise, cash flow, and business returns for optimistic, expected and pessimistic cases are all calculated by the program in the sensitivity analysis tab.

The valuation tab presents valuation figures for each of the three cases. The expected results tab looks very similar to a forecasted, or pro forma, income statement. The major difference is the fact that the expected results tab concludes with return on total investment instead of net income or earnings per share. The results for optimistic and pessimistic cases are also provided separately. Charts of the forecasted returns, operating surplus and expected surplus and returns are all offered.

The Business Valuation Model provides a cost-effective method for generating future business valuations and forecasted business figures. The program does not generate exact figures for future stock price or market capitalization, but it can be used in conjunction with other fundamental analysis tools to create a system for researching potential company growth based on current figures for three separate cases.

Click here to download.

Business Valuation Model for Excel

System Requirements: Windows Operating System

Price: $69.00 with 30-day money-back guarantee; free limited trial


No comments have been added yet. Add your thoughts to the discussion!

You need to log in as a registered AAII user before commenting.
Create an account

Log In