Build a Company Valuation
Connect operating prospects, market evidence and shareholder claims in one valuation framework.
Company value by method · illustrative EUR millions
Preview · Illustrative assumptions · No market dataValue by method
| Method | EV | Equity |
|---|---|---|
| DCF · Growth | 23 | 20.9 |
| DCF · Exit | 19.6 | 17.5 |
| Trading comps | 20 | 17.9 |
| Precedents | 25 | 22.9 |
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Define the valuation question first
A company valuation estimates the value of a specified business or ownership claim at a specified date. Define the purpose before choosing a formula: investment review, strategic planning and acquisition negotiations can require different evidence and assumptions. State the currency, operating perimeter and whether the conclusion is enterprise value or equity value.
The enterprise-to-equity bridge explains the claim being valued. A price paid for shares is not automatically the value of the operations; cash, debt and other claims can change the reconciliation. Keep a proposed transaction price separate from the analytical valuation conclusion.
Use intrinsic and relative evidence for different questions
Intrinsic valuation asks what the business can generate for investors, given its risks and reinvestment needs. The DCF valuation model develops this from a linked operating forecast. Growth contributes only if its cash generation compensates for investment and risk. A detailed forecast still needs a defensible long-run state.
Relative valuation asks how comparable assets are priced. Trading comparables use public-company observations, while precedent transactions use acquisition evidence. Business mix, dates, control and buyer-specific economics explain why these reference points may differ.
Choose methods according to the evidence available
Use the valuation-method selection framework to assess forecast credibility, peer similarity and transaction relevance. Reliable inputs matter more than the number of methods in the presentation. Where an earnings denominator is negative or a transaction sample is thin, explain why the method cannot support a conventional range.
For DCF, justify the discount rate and terminal economics. For market methods, align value definitions with the selected earnings period and accounting basis. Avoid using a precise multiple or rate to conceal uncertainty in the business assumptions.
Reconcile evidence rather than average it mechanically
The preview holds one operating case and bridge consistent across four outputs. Illustrative trading multiples of 6×, 8× and 10× applied to EUR 2.5 million EBITDA select EUR 20 million EV; illustrative acquisition multiples of 8×, 10× and 12× select EUR 25 million. These assumptions are examples, not observed market data.
The same case gives approximately EUR 23.0 million DCF EV using growth terminal value and EUR 19.6 million using an exit multiple. Investigate the forecast, terminal basis and market assumptions behind the difference. A simple average would give the inputs equal evidential weight without establishing that they deserve it.
Present the range on a common basis
Use a Football Field to display method ranges after reconciling enterprise value, equity value, currency, units and date. A range communicates variation in chosen assumptions or evidence; it is not automatically a statistical confidence interval. Preserve the selected result as well as its boundaries.
Explain which evidence receives the greatest weight and why. A buyer may separately evaluate financing, integration or synergies. An LBO sponsor-return analysis tests entry and exit assumptions against financing and returns; it does not replace the operating value conclusion or solve an intrinsic value by itself.
Keep the conclusion traceable to assumptions
In BalanceCheat, use the Value module to keep DCF, trading comparables, precedents and the summary connected to the model. The valuation implementation reference documents selected periods, reported or adjusted bases, saved inputs and available outputs. Supply market observations and rate assumptions yourself; no live market-data service is implied.
Record the forecast case, evidence dates, selected multiples, bridge items and reasons for exclusions. Revisit the conclusion when the economics or evidence changes. The framework remains useful because each value can be traced to its assumptions rather than presented as an unsupported single answer.
Frequently asked questions
How does this differ from Valuation Methods?
This page develops the overall company valuation framework. Valuation Methods focuses on choosing and combining approaches according to their evidence and limitations.
Must all methods give the same value?
No. Different forecasts, market conditions, control effects and terminal assumptions can produce different ranges. Explain the causes before combining results.
Does a Football Field calculate another valuation?
No. It summarizes selected method outputs on a common basis.
Does BalanceCheat supply live peers or market rates?
No. The valuation workflow uses the observations and assumptions you supply. The previews contain illustrative examples.