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BUSINESS EXAMPLE

Example Org.
Stockholm, Stockholm County   Brokered By: Administrator
Asking Price: 1,700,000 kr Sales Revenue: 32,292,670 kr Cash Flow: 10,000 kr


Business Information

Business Information
Extended Information Enabled

Business Identifier (used in Business Search Result)

Example Org.

Reference

Looking For

Partner

Company Start Date

2008-09-19

Financial Year End

September

Sector

Retail

Industry

Other

Business Description

This business serves as an example on BusinessPortal-SE and all data added is fictional. You will not be able to add it to your shortlist or message the business owner and it will not come up in any searches on BusinessPortal-SE. Some factors in the Human Resources section and in the Valuations are time dependent. This is how they would have appear in April 2016. One of the existing partners wants to sell 10% of his shares. Salaries, marketing and other costs need to be increased over the next 5 years to come in line with market costs. Looking for somebody dynamic with contacts in the industry.

Registered for VAT

Yes

Franchise

No

Type of Business

Limited Company

Current Status

In Talks

County

Stockholm County

City

Stockholm

Business Environment

A fictional office park

Supplier Types

Paper, Raw Materials for Prodution, Electricity, IT Services, Telecommunications, Courier Services, Catering, Marketing, Accounting, etc.

Client Types

Final users of products.

Legal Regulation

Member of a fictional regulatory body. No pending lawsuits outstanding. New regulations in the industry may impact sales in the future.

Asking Price (kr)

1,700,000

Annual Turnover (kr)

32,292,670

Monthly Free Cash Flow (kr)

10,000

Estimate of Business Value (kr)

10,400,000

Estimate based on

Assets - Liabilities + investment amount at 12% to provide equivalent income to free cash flow.

SWOT analysis

SWOT analysis
Extended Information Enabled

Strengths

Good name in the industry. Very secure supply line. Strong work ethic of employees. High financial barriers to entry in the industry

Weaknesses

Very reliant on key employees. Administration is not well organised. Not ideally placed to serve client base.

Opportunities

Moving to more suited premises. Expanding into new markets. Finding new clients. Cutting costs of transport and production.

Threats

One strong competitor with good R & D. New products in development but unlikely to come to market until 2017.

Human Resource Information

Human Resource Information
Extended Information Enabled

Board Members

No Board Members entered for this business


Partners

Partner Type Time at Company Highest Education/Certification Annual Salary Other Benefits Other Benefits Explanation Ownership % Voting Rights % Entered as Board Member
Silent 62 Months Masters Degree 0 kr 180,000 kr Retainer 10.00% 0.00%
Active 62 Months Doctorate 1,080,000 kr 108,000 kr Car and Phone Allowance 50.00% 50.00%
Active 30 Months Masters Degree 1,500,000 kr 0 kr 30.00% 30.00%


Managers

Manager Type Alternate Manager Type Description Time at Company Highest Education/Certification Annual Salary Other Benefits Other Benefits Explanation Ownership % Voting Rights % Entered as Board Member Entered as Partner
Financial 15 Months Bachelors Degree 600,000 kr 0 kr 0.00% 10.00%
Sales 62 Months Doctorate 1,080,000 kr 108,000 kr Car and Phone Allowance 50.00% 50.00% Yes
Operations 30 Months Masters Degree 1,500,000 kr 0 kr 30.00% 30.00% Yes

Estimated Annual Increase/Decline (%)

0.00

Estimated Annual Turnover (%)

0.00


Employees

Employee Type Alternate Employee Type Description Job Description Time at Company Highest
Education/Certification		 Annual Salary Other Benefits Other Benefits Explanation Ownership % Voting Rights % Unionised Entered as Board Member Entered as Partner Entered as Manager
Operations Logistics and Transportation 40 Months Bachelors Degree 540,000 kr 0 kr 0.00% 0.00% No
Operations Logistics and Transportation 32 Months Secondary School 450,000 kr 0 kr 0.00% 0.00% No
Custodial Cleaner 15 Months Secondary School 180,000 kr 0 kr 0.00% 0.00% No
Sales Sales Team 20 Months Diploma 570,000 kr 60,000 kr Commission 0.00% 0.00% No
Administration Finance and Logistics 12 Months Bachelors Degree 450,000 kr 0 kr 0.00% 0.00% No
Sales Sales Team 34 Months Diploma 600,000 kr 60,000 kr Commission 0.00% 0.00% No
Multiple Operations and Administration Training for Finance, Logistics and Transportation 6 Months Secondary School 360,000 kr 0 kr 0.00% 0.00% No
Operations Engineer 36 Months Masters Degree 1,080,000 kr 0 kr 0.00% 0.00% No
Operations Engineer 60 Months Masters Degree 1,200,000 kr 0 kr 0.00% 0.00% No

Estimated Annual Increase/Decline (%)

0.00

Estimated Annual Turnover (%)

5.00


Ownership Structure

Ownership Structure
Extended Information Enabled

Ownership Distribution

Private Ownership

Business Ownership
Board Members Ownership % 0.00%
Partners Ownership % 90.00%
Managers Ownership % 0.00%
Employees Ownership % 0.00%
First Business (%)
10.00
Second Business (%)
0.00
Remaining Business (%)
0.00
Public Ownership (%)
0.00
Voluntary (non dividend paying) Ownership (%)
0.00

Ownership Distribution Graph




Voting Weights

Private Voting Weight

Business Voting Weight
Board Members Voting Weight % 0.00%
Partners Voting Weight % 80.00%
Managers Voting Weight % 10.00%
Employees Voting Weight % 0.00%
First Business (%)
10.00
Second Business (%)
0.00
Remaining Business (%)
0.00
Public Voting Weight (%)
0.00
Voluntary (non dividend) Voting Weight (%)
0.00
Alternative Voting Right
Oldest Partner has the right to Vito decisions.

Voting Distribution Graph



Selling Proposition

Selling Proposition
Extended Information Enabled

Products

Cost and Price Structure Comparison to Competing Products – If the Best Competing Product has a Rating of 10 my Product rates at: Marketing Per Product
Product Category Product or Production Cost Markup Current Selling Price Quality Fit for customer Affordability Availability Being in
Customers' Mind		 Marketing Approach Monthly External
Marketing Spend
Product Type A 50 kr 20.00% 60 kr 9 12 12 6 6 Direct/Targeted 5,000 kr
Product Type B 150 kr 6.67% 160 kr 5 5 13 13 8 Media Advertising 30,000 kr


Services

Cost and Price Structure Comparison to Competing Services – If the Best Competing Service has a Rating of 10 my Service rates at: Marketing Per Service
Service Classes Cost/hour to produce service Markup Average Billing price Alternative Service Pricing Customer tailoring Affordability Timeousness Being in
Customers' Mind		 Marketing Approach Monthly External
Marketing Spend
Rent Cottage on Property 0 kr 0.00% 0 kr 12000/Month 10 10 10 10 Word of Mouth 0 kr
Service Type A 250 kr 60.00% 400 kr 10 10 10 10 Business to Business 0 kr
Service Type B 150 kr 200.00% 450 kr 15 8 15 15 Business to Business 0 kr
Service Type C 50 kr 200.00% 150 kr Plus km driven at 5kr/km 10 10 8 8 Business to Business 0 kr


Business Processes

Business Processes
Extended Information Enabled

Products

Purchasing of Products, Part-Products (requiring assembly) or Raw Materials for the production of Products Product or Production Cost (Estimate % of Spend towards Product Manufacturing/Purchase Price pre Sale for…) Sales
Product Category Product Type Payment terms Alternative Description Delivery terms Purchasing Labour Transport Services Storage of raw materials/part products Storage of final Product Commission % paid on Sales Variable Commission paid Rules for Variable Commission Customer Payment Terms Alternative Description Delivery Terms Sales Effort towards Product
Product Type A Final Product 90 days 14 days 70.00% 5.00% 15.00% 0.00% 0.00% 10.00% 5.00% No 30 days 7 days 35.00%
Product Type B Part Product (requires assembly) 90 days 30 days 45.00% 30.00% 5.00% 5.00% 8.00% 8.00% 5.00% No 30 days 14 days 65.00%


Services

Cost/Hour to produce Service (Estimate % of Service Production Spend per Service) Sales
Service Classes Labour Licence Fees Services Consumables Commission % paid on Sales Variable Commission paid Rules for Variable Commission Customer Payment Terms Alternative Description Delivery Terms Sales Effort towards Service
Service Type A 80.00% 10.00% 5.00% 5.00% 0.00% No 30 days Delivery before payment 0.00%
Service Type B 60.00% 20.00% 0.00% 20.00% 0.00% No 30 days Delivery before payment 0.00%
Service Type C 35.00% 0.00% 5.00% 60.00% 0.00% No 7 days 1 day 0.00%
Rent Cottage on Property 0.00% 0.00% 50.00% 50.00% 0.00% No 30 days Delivery before payment 0.00%


Assets

Assets
Extended Information Enabled

Income Generating (necessary for production) Assets

Raw Materials

Description Purchase Date Purchase Price Selling Price (on purchase date)
Raw Materials for Product Type B 2014-09-03 1,000,000 kr 800,000 kr

Stock on hand

Amount of stock available for sale
2,500,000 kr

Equipment

Description Purchase Date Purchase Price Selling Price (on purchase date)
Truck 2010-08-19 360,000 kr 240,000 kr
Truck 2013-07-19 450,000 kr 400,000 kr
Computers 2012-05-11 40,000 kr 30,000 kr

Property (if rented out)

No Property (if rented out) added

Business Interests

Description Stake Purchase Date Purchase Price Selling Price (if sold today)
Swapped for 10% stake in Example Org. 20.00% 2015-08-19 0 kr 0 kr

Loans Given or Negative Balance in Loan Account

Loans Given or Negative Balance in Loan Account     Last modified: 2014-01-03
Description Amount Repayment Condition Interest Rate Monthly Repayment
Outside Party 360,000 kr Loan to Partners Family 7.00% 16,000 kr


Non-Income Generating Assets

Property (if not rented out)

Description Purchase Date Purchase Price Selling Price (if sold today)
Business Property 2010-02-25 3,600,000 kr 4,500,000 kr

Other Non-income generating Assets

No Other Non-income generating Assets added


Liabilities

Liabilities
Extended Information Enabled

Outstanding Invoices owed to Suppliers for Raw Materials, Stock and/or Consumables and Other Monthly Costs

 
Total Due (kr)

450,000

Less than 7 days late (kr)

40,000

Between 7 and 14 days late (kr)

0

Between 14 and 30 days late (kr)

0

Between 30 and 60 days late (kr)

0

More than 60 days late (kr)

0

Not to be paid (kr)

16,000

Reason for non-payment

Defective stock that wasn't retrieved.

As at:

2014-01-01


Outstanding Debts on Assets

Last modified: 2014-06-23
Asset Class Outstanding Amount Remaining Term Monthly Repayment Interest Rate Repayments Up To Date Months Overdue
Property (if not rented out) 1,600,000 kr 84 Months 50,000 kr 4.34% Yes 0 Months
Motor Vehicles 160,000 kr 24 Months 5,000 kr 6.35% Yes 0 Months


Outstanding Loans or Positive Balance in Loan Account

Last modified: 2013-10-03
Loan Type Outstanding Amount Repayment Conditions Interest Rate Monthly Repayment
Partners 500,000 kr Interest paid only 12.00% 5,000 kr


Other Outstanding Loans

Last modified: 2014-06-24
Loan Name Outstanding Amount Repayment Conditions Interest Rate Monthly Repayment
Starting Capital 300,000 kr Interest paid only 12.00% 3,000 kr


Outstanding Salaries

No Outstanding Salaries added


Unsellable Stock

Last modified: 2014-01-03
Outstanding Amount
120,000 kr


Other Monthly Costs

No Other Monthly Costs added


Financial Information

Financial Information
Extended Information Enabled

Account Information

Last modified: 2014-01-03
Account Type Balance Interest Rate
(+ve Balance)		 Interest Rate
(-ve Balance)		 Overdraft/Credit/
Access Bond/
Savings Available Funds
Cheque 350,000 kr 0.05% 14.00% 1,000,000 kr
Cheque -100,000 kr 0.05% 9.95% 400,000 kr
Credit 30,000 kr 3.00% 14.55% 50,000 kr
Property Loan -1,600,000 kr 0.00% 4.34% 400,000 kr


Income Recovery Rate

Estimate % of Payments


On or before
payment date
87.00
Less than 7 days late
9.00
Between 7 and
14 days late
0.00
Between 14 and 30 days late
0.00
Between 30 and 60 days late
3.80
More than 60
days late
0.00
 
Unrecoverable
0.20

Income Recovery Graph



Current Expected Income

Last modified: 2014-01-03

Total Due (kr)


1,200,000

Total Overdue (kr)


160,000


Invoicing

Invoicing
Extended Information Enabled

Products

Last modified: 2014-01-07
Forecast Annual Invoicing Amounts Forecast Monthly Invoicing Amounts for Next Year Historical Monthly Invoicing Amounts for Last Year Historical Annual Invoicing Amounts
Product Category Year 5 Year 4 Year 3 Year 2 Month 12 Month 11 Month 10 Month 9 Month 8 Month 7 Month 6 Month 5 Month 4 Month 3 Month 2 Month 1 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 2 Year 3 Year 4 Year 5
Product Type A 9,540,000 kr 9,452,000 kr 7,470,000 kr 6,570,000 kr 688,000 kr 668,000 kr 767,000 kr 656,000 kr 590,000 kr 656,000 kr 845,000 kr 684,000 kr 601,000 kr 959,000 kr 405,000 kr 415,000 kr 625,000 kr 715,000 kr 615,000 kr 555,000 kr 785,000 kr 640,000 kr 525,000 kr 760,000 kr 565,000 kr 890,000 kr 390,000 kr 395,000 kr 8,125,000 kr 7,445,000 kr 6,600,000 kr 8,000,000 kr
Product Type B 30,000,000 kr 28,000,000 kr 26,000,000 kr 25,000,000 kr 1,900,000 kr 1,900,000 kr 1,900,000 kr 1,900,000 kr 1,900,000 kr 1,900,000 kr 1,900,000 kr 1,900,000 kr 1,900,000 kr 1,900,000 kr 1,900,000 kr 1,900,000 kr 1,950,000 kr 1,725,000 kr 1,725,000 kr 2,175,000 kr 1,875,000 kr 1,845,000 kr 2,130,000 kr 2,130,000 kr 2,130,000 kr 1,095,000 kr 1,095,000 kr 1,575,000 kr 24,000,000 kr 24,000,000 kr 21,750,000 kr 19,800,000 kr
Totals  39,540,000 kr 37,452,000 kr 33,470,000 kr 31,570,000 kr 2,568,000 kr 2,568,000 kr 2,667,000 kr 2,556,000 kr 2,490,000 kr 2,556,000 kr 2,745,000 kr 2,584,000 kr 2,501,000 kr 2,859,000 kr 2,305,000 kr 2,315,000 kr 2,575,000 kr 2,440,000 kr 2,340,000 kr 2,730,000 kr 2,660,000 kr 2,485,000 kr 2,655,000 kr 2,890,000 kr 2,695,000 kr 1,985,000 kr 1,485,000 kr 1,970,000 kr 32,125,000 kr 31,445,000 kr 28,350,000 kr 27,800,000 kr


Services

Last modified: 2014-01-07
Forecast Annual Invoicing Amounts Forecast Monthly Invoicing Amounts for Next Year Historical Monthly Invoicing Amounts for Last Year Historical Annual Invoicing Amounts
Service Classes Year 5 Year 4 Year 3 Year 2 Month 12 Month 11 Month 10 Month 9 Month 8 Month 7 Month 6 Month 5 Month 4 Month 3 Month 2 Month 1 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 2 Year 3 Year 4 Year 5
Rent Cottage on Property 228,400 kr 207,636 kr 188,760 kr 171,600 kr 13,000 kr 13,000 kr 13,000 kr 13,000 kr 13,000 kr 13,000 kr 13,000 kr 13,000 kr 13,000 kr 13,000 kr 13,000 kr 13,000 kr 12,000 kr 12,000 kr 12,000 kr 12,000 kr 12,000 kr 12,000 kr 11,000 kr 11,000 kr 11,000 kr 11,000 kr 11,000 kr 11,000 kr 126,000 kr 116,000 kr 90,000 kr 85,000 kr
Service Type A 1,600,000 kr 1,400,000 kr 1,200,000 kr 1,000,000 kr 75,000 kr 75,000 kr 75,000 kr 75,000 kr 75,000 kr 75,000 kr 75,000 kr 75,000 kr 75,000 kr 75,000 kr 75,000 kr 75,000 kr 75,000 kr 83,000 kr 67,000 kr 50,000 kr 133,000 kr 83,000 kr 75,000 kr 83,000 kr 42,000 kr 100,000 kr 58,000 kr 42,000 kr 833,000 kr 720,000 kr 420,000 kr 330,000 kr
Service Type B 1,700,000 kr 1,600,000 kr 1,400,000 kr 1,200,000 kr 100,000 kr 100,000 kr 100,000 kr 100,000 kr 100,000 kr 100,000 kr 100,000 kr 100,000 kr 100,000 kr 100,000 kr 100,000 kr 100,000 kr 100,000 kr 100,000 kr 70,000 kr 160,000 kr 0 kr 50,000 kr 90,000 kr 90,000 kr 140,000 kr 80,000 kr 120,000 kr 64,000 kr 1,100,000 kr 780,000 kr 680,000 kr 480,000 kr
Service Type C 1,900,000 kr 1,700,000 kr 1,600,000 kr 1,500,000 kr 120,000 kr 120,000 kr 120,000 kr 120,000 kr 120,000 kr 120,000 kr 120,000 kr 120,000 kr 120,000 kr 120,000 kr 120,000 kr 120,000 kr 108,000 kr 90,000 kr 146,000 kr 100,000 kr 100,000 kr 122,000 kr 128,000 kr 96,000 kr 98,000 kr 70,000 kr 50,000 kr 54,000 kr 1,284,000 kr 1,250,000 kr 850,000 kr 778,000 kr
Totals  5,428,400 kr 4,907,636 kr 4,388,760 kr 3,871,600 kr 308,000 kr 308,000 kr 308,000 kr 308,000 kr 308,000 kr 308,000 kr 308,000 kr 308,000 kr 308,000 kr 308,000 kr 308,000 kr 308,000 kr 295,000 kr 285,000 kr 295,000 kr 322,000 kr 245,000 kr 267,000 kr 304,000 kr 280,000 kr 291,000 kr 261,000 kr 239,000 kr 171,000 kr 3,343,000 kr 2,866,000 kr 2,040,000 kr 1,673,000 kr


Gallery

Gallery
Extended Information Enabled



DSC_1221.JPG DSC_1595.JPG

Documents

Documents
Extended Information Enabled
No Documents Added

Asset Replacement and Running Costs Valuation

Business Valuation
All Information Available to Business Editors Only

General Comments on Business Valuations

Business Valuations are based on the information added into the Information Sheets and populate as the information is added. If the information is incomplete or inaccurate, it will affect the accuracy of the valuation. These valuations will state assumptions and calculations as far as possible to help you see where the value of your business could be improved. Hover your cursor over or click on table headings with a shaded corner for more information.

Note that, even though these valuations are based on this businesses "management account" information entered, the valuation approach may not be appropriate to the type of business being valued. The final value of a business is the price at which a willing seller will agree with a willing buyer. These valuations act as an informative guide for the range of this businesses value.

This valuation is for 100% of the businesses shares.

For more background information on the valuation principles and assumptions as well as their relevance to this business, please refer to my blog, Business Valuation: A "How to" guide.



Asset Replacement and Running Costs Valuation

The Asset Replacement and Running Costs Valuation is based on the value starting an equivalent company with comparable assets (bought at new prices) and a cash buffer to cover running costs for a given period. It thus represents the absolute maximum an investor should be willing to pay for a business before the option to set up a new one becomes more attractive.

This valuation can be suitable for all kinds of businesses depending on the buffer period for chosen costs. Service industries, which are not asset dependent, might have to work in a higher buffer to cover "Salaries". The buffers for "Marketing Costs", "Costs of Production", "Commission on Sales" and "Extra Monthly Liabilities" should resemble the time taken to bring products to market and develop a stable customer base. Note that this valuation does not take intangible assets (goodwill) into account. Note also that investors might pay more (per share) to buy a portion of a company if financial constraints do not allow them to set up an entire new one.

Asset Replacement Costs

Cumulative Price per Asset Class Inflated Monthly from Purchase Date by Annual Inflation Rate of...
Asset Class ...0% (Purchase Price) ...1% ...2% ...3% ...4%
Raw Materials 1,000,000 kr 1,026,159 kr 1,052,979 kr 1,080,448 kr 1,108,670 kr
Stock on Hand
(at cost price)		 2,500,000 kr 2,500,000 kr 2,500,000 kr 2,500,000 kr 2,500,000 kr
Equipment 850,000 kr 884,382 kr 920,308 kr 957,854 kr 997,100 kr
Property (if rented out) - kr - kr - kr - kr - kr
Business Interests 0 kr 0 kr 0 kr 0 kr 0 kr
Loans Given or -ve Balance in Loan Account
(outstanding amount)		 231,941 kr 231,941 kr 231,941 kr 231,941 kr 231,941 kr
Property (if not rented out) 3,600,000 kr 3,825,701 kr 4,065,347 kr 4,319,797 kr 4,589,920 kr
Other Non-income generating Assets - kr - kr - kr - kr - kr
Total Replacement Asset Value 8,181,941 kr 8,468,183 kr 8,770,576 kr 9,090,060 kr 9,427,631 kr


Monthly Costs

Cumulative Costs per Cost Class for...
Cost Class ...1 Month ...2 Months ...3 Months ...6 Months ...1 Year
Board Members
Salary & Benefits		 0 kr 0 kr 0 kr 0 kr 0 kr
Partners
Salary & Benefits		 239,000 kr 478,000 kr 717,000 kr 1,434,000 kr 2,868,000 kr
Managers
Salary & Benefits		 50,000 kr 100,000 kr 150,000 kr 300,000 kr 600,000 kr
Employees
Salary & Benefits		 462,500 kr 925,000 kr 1,387,500 kr 2,775,000 kr 5,550,000 kr
Total Salaries 751,500 kr 1,503,000 kr 2,254,500 kr 4,509,000 kr 9,018,000 kr
Marketing Costs 35,000 kr 70,000 kr 105,000 kr 210,000 kr 420,000 kr
Cost of Production 1,817,688 kr 3,635,375 kr 5,453,063 kr 10,906,125 kr 21,812,250 kr
Commission on Sales 127,975 kr 255,950 kr 383,925 kr 767,850 kr 1,535,700 kr
Liabilities
Other Monthly Costs		 - kr - kr - kr - kr - kr


Cumulative Costs

Asset Value Inflation Rate
2%
▼
 8,770,576 kr
Months of Salaries Cover
3
▼
 2,254,500 kr
Months of Marketing Costs Cover
6
▼
 210,000 kr
Months of Cost of Production Cover
2
▼
 3,635,375 kr
Months of Commission on Sales Cover
1
▼
 127,975 kr
Months of Extra Liabilities Cover
1
▼
 - kr
Asset Replacement and Running Costs Valuation Total 14,998,426 kr

Current Asset Value minus Liabilities

Business Valuation
All Information Available to Business Editors Only

General Comments on Business Valuations

Business Valuations are based on the information added into the Information Sheets and populate as the information is added. If the information is incomplete or inaccurate, it will affect the accuracy of the valuation. These valuations will state assumptions and calculations as far as possible to help you see where the value of your business could be improved. Hover your cursor over or click on table headings with a shaded corner for more information.

Note that, even though these valuations are based on this businesses "management account" information entered, the valuation approach may not be appropriate to the type of business being valued. The final value of a business is the price at which a willing seller will agree with a willing buyer. These valuations act as an informative guide for the range of this businesses value.

This valuation is for 100% of the businesses shares.

For more background information on the valuation principles and assumptions as well as their relevance to this business, please refer to my blog, Business Valuation: A "How to" guide.



Current Asset Value minus Liabilities Valuation

The Current Asset Value minus Liabilities Valuation is based on value of assets in the company once all liabilities have been excluded. It thus represents the absolute minimum a seller should be willing to sell a business for.

This valuation is only suitable for insolvent businesses which are being bought for their assets. If the company has a turnover and is (or has the potential to be) profitable, its valuation should be higher than the Current Asset Value minus Liabilities Valuation to compensate. The smaller the turnover (or profit) in comparison to this valuation, the closer the company value will be to the Current Asset Value minus Liabilities Valuation. Note that this valuation does not take intangible assets (goodwill) into account.

Current Asset Values

Cumulative Value per Asset Class Depreciated Annually from Purchase Date by Annual Depreciation Rate of...
Asset Class ...0% (Non-Depreciating) ...5% ...10% ...25% ...50%
Raw Materials 800,000 kr 722,000 kr 648,000 kr 450,000 kr 200,000 kr
Equipment 670,000 kr 572,429 kr 487,588 kr 294,609 kr 111,250 kr
Other Non-income generating Assets - kr - kr - kr - kr - kr

Asset Class Cumulative Value per Asset Class at entered Sales Price
Property
(if rented out)		 - kr
Business Interests 0 kr
Property
(if not rented out)		 4,500,000 kr
Total 4,500,000 kr

Asset Class Cumulative Value per Asset Class at entered Asset Price or at outstanding amount
Stock on Hand
(at cost price)		 2,500,000 kr
Loans Given or -ve Balance in Loan Account
(outstanding amount)		 231,941 kr
Current Expected Income as at 2013-10-15 1,200,000 kr
Total 3,931,941 kr


Financial information as at 2016-01-25

Cumulative Account Balance 280,000 kr


Liabilities

Liability Class Long-term Liabilities
Outstanding Invoices as at 2014-01-01 434,000 kr
Outstanding Debts on Assets as at 2014-06-23
(outstanding amount)		 741,901 kr
Outstanding Loans or +ve Balance in Loan Accounts as at 2013-10-03
(outstanding amount)		 500,000 kr
Other Outstanding Loans as at 2014-06-24
(outstanding amount)		 300,000 kr
Outstanding Salaries as at 2016-02-05
(outstanding amount)		 - kr
Unsellable Stock as at 2014-06-25
(outstanding amount)		 120,000 kr
Total 2,095,900 kr

Liability Class Current Liabilities (Monthly Costs for 1 month)
Board Members
Salary & Benefits		 0 kr
Partners
Salary & Benefits		 239,000 kr
Managers
Salary & Benefits		 50,000 kr
Employees
Salary & Benefits		 462,500 kr
Total Salaries 751,500 kr
Marketing Costs 35,000 kr
Cost of Production 1,817,687.50 kr
Commission on Sales 127,975 kr
Liabilities
Other Monthly Costs		 - kr


Cumulative Assets and Account Balance minus Liabilities

Raw Materials
5%
▼
 722,000 kr
Equipment
10%
▼
 487,588 kr
Other Non-income generating Assets
Choose a Depreciation Rate
▼
 - kr
Assets at Sales Price
Include
▼
 4,500,000 kr
Assets at Asset Price or at outstanding amount
Include
▼
 3,931,941 kr
Cumulative Account Balance
Exclude
▼
 - kr
Long-term Liabilities
Include
▼
 -2,095,901 kr
Total Salaries
Include
▼
 -751,500 kr
Marketing Costs
Include
▼
 -35,000 kr
Costs of Production
Include
▼
 -1,817,688 kr
Commission on Sales
Include
▼
 -127,975 kr
Liabilties - Other Monthly Costs
Include
▼
 - kr
Current Asset Value minus Liabilities Valuation Total 4,813,465 kr

Discounted Cash Flow Valuation

Business Valuation
All Information Available to Business Editors Only

General Comments on Business Valuations

Business Valuations are based on the information added into the Information Sheets and populate as the information is added. If the information is incomplete or inaccurate, it will affect the accuracy of the valuation. These valuations will state assumptions and calculations as far as possible to help you see where the value of your business could be improved. Hover your cursor over or click on table headings with a shaded corner for more information.

Note that, even though these valuations are based on this businesses "management account" information entered, the valuation approach may not be appropriate to the type of business being valued. The final value of a business is the price at which a willing seller will agree with a willing buyer. These valuations act as an informative guide for the range of this businesses value.

This valuation is for 100% of the businesses shares.

For more background information on the valuation principles and assumptions as well as their relevance to this business, please refer to my blog, Business Valuation: A "How to" guide.



Discounted Cash Flow Valuation

The Discounted Cash Flow Valuation is based on the amount of income a business is assumed to be able to generate in the future. It is based on forecasts of the growth of company earnings and costs and then converts the resultant Free Cash Flow to a present value by one of two methods:

*       Summing the present values of the Free Cash Flow with a Terminal Value based on company growth that is assumed to eventually be lower than inflation. This assumption comes about because mature companies earnings should approach inflation when their market is saturated.

*       Calculating an equivalent investment amount that would yield the same returns as the final year (assuming stability) of forecast results. The interest rate of this equivalent investment is an indication of the risk this business represents at that stage and should be higher than inflation.

This valuation is suitable for all businesses. It does, however, rely heavily on assumptions about the business, market and future and some factors are highly sensitive to the valuation.

Cash Flow Forecast Assumptions

Salaries Annual Inflation Rate
8%
▼
Marketing Annual Inflation Rate
10%
▼
Other Monthly Costs Annual Inflation Rate
6.5%
▼
Effective Company Tax Rate
25%
▼
Inflation Rate to discount Operating Cash Flow
6.5%
▼
Assumed Growth of Operating Cash Flow after Year 5
2%
▼
Equivalent Risk Interest Rate
10%
▼

Forecast
 Year 5 (kr)
 Year 4 (kr)
 Year 3 (kr)
 Year 2 (kr)
 Year 1 (kr)
 
Extra Income
0
0
0
0
0
 
Extra Costs
350,000
300,000
250,000
200,000
150,000

Cashflow Forecast

Forecast Annual Historical Annual
Income Category Year 5 Year 4 Year 3 Year 2 Year 1 Year 1
Total Entered Product Invoices 39,460,920 kr 37,377,096 kr 33,403,060 kr 31,506,860 kr 30,652,572 kr 28,852,180 kr
Product Invoices Growth 5.58 % 11.90 % 6.02 % 2.79 % 6.24 %
Total Entered Service Invoices 5,417,543 kr 4,897,821 kr 4,379,982 kr 3,863,857 kr 3,688,608 kr 3,248,490 kr
Service Invoices Growth 10.61 % 11.82 % 13.36 % 4.75 % 13.55 %
Loans Given or Negative Balance in Loan Account 0 kr 0 kr 0 kr 51,051 kr 192,000 kr 192,000 kr
Extra Income - kr - kr - kr - kr - kr
Total Income  44,878,463 kr 42,274,917 kr 37,783,042 kr 35,421,768 kr 34,533,180 kr 32,292,670 kr


Forecast Annual Historical Annual
Cost Category Year 5 Year 4 Year 3 Year 2 Year 1 Year 1
Product Cost of Production 27,240,000 kr 25,857,833 kr 22,976,250 kr 21,607,500 kr 21,227,750 kr 19,982,396 kr
Service Cost of Production 838,333 kr 756,667 kr 683,333 kr 610,000 kr 584,500 kr 505,008 kr
Board Members
Salary & Benefits		 0 kr 0 kr 0 kr 0 kr 0 kr - kr
Partners
Salary & Benefits		 4,214,033 kr 3,901,882 kr 3,612,854 kr 3,345,235 kr 3,097,440 kr 2,868,000 kr
Managers
Salary & Benefits		 881,597 kr 816,293 kr 755,827 kr 699,840 kr 648,000 kr 600,000 kr
Employees
Salary & Benefits		 8,154,771 kr 7,550,714 kr 6,991,402 kr 6,473,520 kr 5,994,000 kr 5,550,000 kr
Total Salaries 13,250,401 kr 12,268,889 kr 11,360,083 kr 10,518,595 kr 9,739,440 kr 9,018,000 kr
Marketing Costs 676,414 kr 614,922 kr 559,020 kr 508,200 kr 462,000 kr 420,000 kr
Commission on Sales 1,977,000 kr 1,872,600 kr 1,673,500 kr 1,578,500 kr 1,535,700 kr 1,445,500 kr
Outstanding Debts on Assets 0 kr 0 kr 0 kr 64,259 kr 660,000 kr 660,000 kr
Outstanding Loans or +ve Balance in Loan Account 60,000 kr 60,000 kr 60,000 kr 60,000 kr 60,000 kr 60,000 kr
Other Outstanding Loans 36,000 kr 36,000 kr 36,000 kr 36,000 kr 36,000 kr 36,000 kr
Liabilities
Outstanding Salaries		 - kr - kr - kr - kr - kr - kr
Liabilities
Other Monthly Costs		 0 kr 0 kr 0 kr 0 kr 0 kr 0 kr
Extra Costs 350,000 kr 300,000 kr 250,000 kr 200,000 kr 150,000 kr
Total Cost 44,428,148 kr 41,766,911 kr 37,598,186 kr 35,229,307 kr 34,455,390 kr 32,126,904 kr


Forecast Annual Historical Annual
Summary Year 5 Year 4 Year 3 Year 2 Year 1 Year 1
Total Income 44,878,463 kr 42,274,917 kr 37,783,042 kr 35,421,768 kr 34,533,180 kr 32,292,670 kr
Total Cost -44,428,148 kr -41,766,911 kr -37,598,186 kr -35,229,307 kr -34,455,390 kr -32,126,904 kr
Total Income - Total Cost 450,315 kr 508,005 kr 184,856 kr 192,461 kr 77,790 kr 165,766 kr
Tax -112,579 kr -127,001 kr -46,214 kr -48,115 kr -19,448 kr -41,441 kr
Operating Free Cash Flow 337,736 kr 381,004 kr 138,642 kr 144,346 kr 58,343 kr 124,324 kr
Operating Free Cash Flow Growth -11.36 % 174.81 % -3.95 % 147.41 % -53.07 %
Discounted Operating Free Cash Flow (Current Value) 246,507 kr 296,163 kr 114,775 kr 127,264 kr 54,782 kr 124,324 kr


By Summing Discounted Operating Free Cash Flows By Equivalent investment to yield year 5 Forecast Operating Free Cash Flow
Year 1 54,782 kr
Year 2 127,264 kr
Year 3 114.775 kr
Year 4 296.163 kr
Year 5 246,507 kr
Terminal Value 7,993,092 kr
Discounted Cash Flow Valuation Total 8,832,583 kr 9,495,790 kr