Jeslin Bay, the Managing Partner of BlackStorm Consulting, once said, "To understand the value of your company is a tedious but necessary process.".
BlackStorm Consulting has put together a valuation template for entrepreneurs and investors to understand the various benefits of valuation. There will be six different valuation methods that the company can use according to the available data at hand in this template. This template contains clear, specific instructions on how to use them. Additionally, various explanations are provided for key financial terms for the user to learn and understand. An example of how to use each template is also provided to help in the understanding of valuation. Anybody without a financial background will be able to understand and use these toolkits easily.
Company Valuation Template:
This excel spreadsheet is a compilation of different methods that can be used to value a company. Different formulas have been affixed into the cell, which should not be changed. You can then use the excel spreadsheets accordingly by keying in the different values the company has.
There are a total of six simple and useful methods to help a company with its valuation. The different methods each have their pros and cons, and companies should choose which method should best be used accordingly. Different definitions of the respective finance terms have been included in each sheet. Additionally, we have included the industry average that the company can work towards to and hold as a target.
01.Discounted Cash Flow (DCF)
Estimate the value of an investment based on its expected future cash flows.
02. Venture Capital Method
By estimating the business's future value by using the return on investment, the entrepreneur will be able to attain a gauge of the current value of the business.
03. Comparable Transaction Method
Companies compare themselves against other businesses of similar nature and size to them.
04. Valuation by Stage
Allows a company to value itself based on the development stage.
05. First Chicago Method
Different scenarios that are tied to the performance of the economy will be taken into account.
06. Valuation Scorecard Method
Valuation method that gives assurance to investors as various different risks are taken into consideration.
02:23 Method #01: Discounted Cash Flow
04:45 Method #02: Venture Capital
07:03 Method #03: Comparable Transactions
08:50 Method #04: Valuation by Stage
09:24 Method #05: First Chicago
10:30 Method #06: Scorecard Valuation