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AF talks Business Valuation Services, Investment Appraisals

Alpha-Financials was the main speaker at the recent Annual General Meeting of the CIMA Chiltern Branch. The topic for discussion: ‘Business Valuation and Investment Appraisal’. The presentation started with the posing of a seemingly simple question:

‘What is the value of a £1 coin?

Simple, right?

Only if your answer was ‘Around £5’!

Although not obvious, given the right circumstances or – as Alpha-Financials refers to it – given the right ‘full picture’ to go along with the valuation, then yes, this one pound coin appears to be worth five times its face value. This simple scenario demonstrates the power of business valuation and why understanding the different approaches to valuing a business is so important. Although the PE Ratio approach is one option commonly applied for SMEs, Alpha-Financials prefers the discounted cash-flow (DCF) method for business valuation. To demonstrate the DCF method, the presentation followed a recent client case study. In this particular scenario, an Alpha-Financials client had questions pertaining to the financial viability of a green energy supplying contract. In particular, they wanted Alpha-Financials’ advice on what percentage of the savings could be passed on to the end-user without jeopardizing their required Return on Investment (ROI). The presenters walked the audience through the investment appraisal process using Alpha-Financials’ innovative financial tool developed in-house specifically for valuing a business. The demonstration provided the audience with a quick comparison between the valuations of projects and companies and ended with practical tips on finding information to aid with business valuations.

Want to learn more? Contact us today or book Alpha-Financials for your next event.


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