Every certified valuation starts from the same three questions. Which one carries the conclusion depends on how a buyer would actually price your business, and the report has to say why.
Brisbane businesses are valued with the same three approaches used across Australia. The income approach converts the earnings a business can sustain into a present value, the market approach compares it with prices paid for similar businesses, and the asset approach restates everything it owns and owes to current value. A certified valuer weighs the results and explains which one led.
If a buyer is paying for the profit this business will keep making, what is that profit stream worth now, allowing for the chance it falls short?
Read the methodWhat have buyers actually paid for businesses of this kind and size, and how do listed peers in the sector price their earnings?
Read the methodIf each item the business owns were sold at today's prices and everything it owes were settled, what would the owners be left with?
Read the methodEach approach that is applied gives its own range, and the ranges are laid next to each other. The valuer then sets out in ordinary language which result best reflects how a buyer would price this business, which results were used only to test it, and which approaches were considered and set aside, with the reason. A Fortitude Valley bar with a steady record of nearby venue sales is weighted one way; a Rocklea engineering workshop whose worth sits mostly in machinery and a freehold shed is weighted another.
The reconciled figure is a range of enterprise value. To reach the owners' equity, interest-bearing debt is subtracted and any surplus cash, idle assets or liabilities unrelated to trading are adjusted for, giving the value of the whole business as a controlling, saleable holding. Where the subject is a minority parcel of shares, or an interest that would be hard to sell, any discount for lack of control or lack of marketability is applied after that step, together with the reason for its size.
A reviewer reads the reconciliation before anything else. Whether it is the opposing expert in a Supreme Court of Queensland proceeding, an ATO case officer or a bank's credit team, the question is the same: does the conclusion follow from the evidence, or was a number picked first and supported afterwards?
How much of that working appears in your report depends on who will read it and why. An Indicative valuation is for internal decision-making and is not written for third party reliance. A Summary report sets out the approaches applied and the reasoning behind them, and a Detailed report applies and reconciles all relevant approaches in full.
For internal decision-making. Useful for testing an offer, setting an expectation before a negotiation, or deciding whether to go to market. It is not written for third party reliance.
Sets out the approaches applied, the normalisation adjustments made and the reasoning behind the conclusion. The usual choice for a sale, an ownership change or a finance application.
Applies and reconciles all relevant approaches in full. The level required where a court, the ATO, a lender or another expert will review the opinion.