Business Valuation Model Excel

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http:..!!! bi,peponline com. #o start use the sheet tabs to select the &nput sheet Then add your business inputs to determine a forecast and valuation In ut is in $lue cells only /or full help please refer to the: &nstruction 'heet Software License:

Not Licensed, for Evaluation Only

In Evaluation Mode Business Revenue a lied is loc!ed and not calculated" #o fully ena$le t%is software it must $e licensed" &urc%ase a license usin' t%e lin! $elow" Re'istration details will t%en $e sent $y email"
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Model Excel

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ect the &nput sheet

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and fully ena$le your software"

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vered by our /. day money $ac! 'uarantee ive #e$istration %etails by return email e$ister and fully enable your soft!are

viduals and business to serious ris) mber of the Bi,pep -roup

Not Licensed, for Evaluation Only" In Evaluation Mode Business Revenue a lied is loc!ed and not calculated" &urc%ase a license usin' t%e lin! on t%e :elcome s%eet"

In ut 0 Business Valuation Model Excel Blue cells allo! input Vie! comments by positionin$ your mouse over the red mar)er cell or clic) the hyperlin) for the &nstruction 'heet )urrent O eratin' &erformance ;ata Business 0ame or &dentifier This section revie!s current business performance for a full year 2(ample Business This appears on the 3utput 'heets

5004000 "nnual business revenue for the current year Business #evenue In evaluation mode Business Revenue a lied in )alculation s%eets is loc!ed to t%e Exam le value of 1....." Monetary &ercent 'et the 2(pense &nput as 5onetary or 6ercent 2(penses Variable *osts "nnual costs that vary !ith the level of revenue 5aterials H 'upplies 104000 2 *ost of items used in the product.service or resold 2004000 70 *ost of labor includin$ all benefits and add-ons 1abor e(cludin$ 3!ner 504000 10 *ost of an employee !ho could replace the o!ner 1abor 3!ner %istribution 204000 7 *ost to $et the product.service to the consumer 104000 2 *ost of mar)etin$ and promotion 5ar)etin$ 3ther 204000 7 "ny other costs incurred in the product.service /2.,... ,3 Total Variable *osts and their 8 of #evenue Total Variable *osts "nnual costs that do not vary !ith revenue /i(ed *osts 1ocation 704000 9 *ost of rent4 utilities etc 2(clude o!nership costs :04000 6 *ost of administration supplies and re;uirements "dministration 1abor e(cludin$ 3!ner 504000 10 *ost of labor includin$ all benefits and add-ons 104000 2 *ost of an employee !ho could replace the o!ner 1abor 3!ner &nterest *osts 0 0 &nterest component of loans4 'et to 0 for valuation 0 0 "ny other overhead costs not already included 3ther 2/.,... 3, Total /i(ed *osts and their 8 of #evenue Total /i(ed *osts 3peratin$ 'urplus ,.,... 23 3peratin$ surplus before ta(ation 23.,... 34 3peratin$ surplus to o!ner includin$ !a$es 3!ner *ash /lo! <orecast ;ata #elative &ndicator 1evel of *ompetition 5ar)et 'tren$th 5aterials H 'upplies *osts 1abor *osts &nterest #ates Business 5ar)et 6osition Variable *osts 2fficiency /i(ed *osts 2fficiency /i(ed *osts /lo!-on Valuation ;ata 3!ners Time *ommitment to Business 3!ners 2(ternal 2arnin$ 6o!er #eplacement Value of Business "ssets 1ife of "ssets IyearsJ 5ar)et Value of 6roperty 3ther &nvestment in Business Total &nvestment /inanced "mount 2;uity &nvestment 1008 604000 1004000 9 0 1794591 2794591 0 2794591 &nput the percenta$e of !or) hours applied to the business Ao! much could the o!ner earn if !or)in$ outside the businessB Chat is the value of business assets e(cludin$ property Chat is the avera$e life of the assetsB Ao! much could you sell the business real estate forB 3peratin$ capital4 $ood!ill4 etc This is adDusted by Valuation )urrent Ex ected Valuation E%&V.0F &nput amount financed4 interest rate is calculated This is the amount of e;uity in the business 5ear 2 10:8 1058 1058 1008 1008 1108 10:8 1008 258 &nput #elative &ndicators to build a : <ear /orecast 5ear 3 1008 1008 1058 10:8 1058 1058 1058 1028 5ear / 9=8 1008 1008 1058 958 10:8 1008 1058 &ndicators are #elative to the prior year >100?&nc4 @100?%ec *ompetition >100?&nc4 @100?%ec 5ar)et 'tren$th >100?&nc4 @100?%ec base *osts >100?&nc4 @100?%ec base *osts >100?&nc4 @100?%ec base &nterest >100?&nc4 @100?%ec Business 6osition >100?&nc4 @100?%ec Variable 2fficiency >100?&nc4 @100?%ec /i(ed 2fficiency

The 8 increase in /i(ed *osts for each 1008 increase in revenue

Out ut 0 Business Valuation Model )urrent Ex ected Valuation is 346,1-2 refer to Valuation (nalysis for details" 'ummary outputs are included on the 'ensitivity and Valuation "nalysis 'heets %etails are in tabular form on the #esults 'heets and $raphical form on the *hart 'heets To vie! comments position your mouse over the red mar)er cell or clic) the hyperlin) to access the &nstruction 'heet To display 'heets clic) the associated button or tab Out ut S%eets 'ensitivity "nalysis &nput sensitivity factors to determine your forecast and valuation ran$e Valuation "nalysis &nput your desired #eturn on &nvestment to calculate the Business Valuation 2(pected #esults Vie! 2(pected Business : <ear /orecast in detail 3ptimistic #esults Vie! 3ptimistic : <ear Business /orecast in detail 6essimistic #esults Vie! 6essimistic : <ear Business /orecast in detail /orecast #evenue *hart Vie! : <ear /orecast business #evenueG 3ptimistic4 2(pected4 and 6essimistic /orecast #eturn *hart Vie! : <ear /orecast business #eturnG 3ptimistic4 2(pected4 and 6essimistic 3peratin$ 'urplus *hart Vie! : <ear /orecast 2(pected 'uplus and *osts 'urplus H #eturn *hart Vie! : <ear /orecast 2(pected 'urplus H #eturn on 'ales and #eturn on &nvestment 8 )o yri'%t 7 www"$i8 e online"com a mem$er of t%e Bi8 e 9rou "

Sensitivity (nalysis 0 Business Valuation Model Excel To test the sensitivity of your forecast input adDustment percenta$es in the blue cells -reen cells provide 3ptimistic results4 yello! cells 2(pected4 and tan cells 6essimistic "n 3utput 'ummary is provided at the bottom of this sheet 3ptimistic4 improve the variation of all #elative &ndicators by 208 -o to Valuation 208 6essimistic4 de$rade the variation of all #elative &ndicators by )urrent 5ear 5ear 2 5ear 3 5ear / / 5ear (vera'e Business #evenue 5004000 5=94699 6174769 6604:6: 61941=: 3ptimistic 2(pected 5004000 5604690 5994=17 6254129 591450= 6essimistic 5004000 5724095 56:4=69 5914795 5654=9: 3peratin$ 'urplus 3ptimistic 604000 9=40:1 1224621 1294=79 116476= 2(pected 604000 994695 10641=0 1054:=2 10040=9 6essimistic 604000 904605 904729 924:96 9747=: 3!ner *ash /lo! 3ptimistic 1204000 15=40:1 1974721 19746:9 1=9469= 2(pected 1204000 1794695 16=49=0 1=04262 1624:09 6essimistic 1204000 1704605 1524229 17=42=6 1764=0: Business #eturn 3ptimistic 7=4500 9740:: 1094=66 11=42:9 10:46=9 2(pected 7=4500 =54915 9:4115 924090 9=400= 6essimistic 7=4500 6=4972 ==41=0 694:17 =14109 Summary The : <ear "vera$e 2(pected Business #eturn is 6=,..= per year 'ensitivity "nalysis indicates a #eturn hi$h of 2./,,=to a lo! of =2,2.6 per year )o yri'%t 7 www"$i8 e online"com a mem$er of t%e Bi8 e 9rou "

Valuation (nalysis 0 Business Valuation Model Excel &nput your desired #eturn on &nvestment to $enerate a Valuation To Kpdate the #eturn calculations input your Valuation and clic) the Kpdate Button "ll input is in the blue cells -reen cells provide 3ptimistic results4 yello! cells 2(pected4 and tan cells 6essimistic "n 3utput 'ummary is provided at the bottom of this sheet <inance is currently set at I'et &nterest H "mount to 0 for initial ValuationJ Sensitivity is currently set at Interest 0 "dDust &nterest *ost O timistic (mount 0 "dDust /inance "mount 208

208 &essimistic "dDust 'ensitivity 2794591 5ear 2 9740:: :78 =54915 :08 6=4972 2=8

#otal Investment is currently set at Business Return O timistic 8 #eturn on Total &nvestment Ex ected > Return on #otal Investment &essimistic > Return on #otal Investment /or an avera$e : <ear #eturn on &nvestment of 2(pected #eturn results in a Valuation of 3ptimistic #eturn results in a Valuation of 6essimistic #eturn results in a Valuation of )urrent 5ear 7=4500 198 7=4500 198 7=4500 198

This is used for #eturn *alculations 5ear 3 1094=66 778 9:4115 :=8 ==41=0 :18 5ear / 11=42:9 7=8 924090 :=8 694:17 2=8 / 5ear (vera'e 10:46=9 728 9=400= :58 =14109 298

/1> &nput your re;uired #eturn on &nvestment 346,1-2 #%is is t%e calculated )urrent Ex ected Valuation" 3-,,33, This is the calculated 3ptimistic Valuation 3./,2,= This is the calculated 6essimistic Valuation Summary The "vera$e 2(pected #eturn from the business is 6=,..= per year 'ensitivity "nalysis indicates a #eturn hi$h of 2./,,=to a lo! of =2,2.6 per year "n avera$e : <ear #eturn on &nvestment of :58 $ives an 2(pected Valuation of 346,1-2 'ensitivity "nalysis indicates a Valuation hi$h of 3-,,33, to a lo! of 3./,2,= )o yri'%t 7 www"$i8 e online"com a mem$er of t%e Bi8 e 9rou "

Ex ected <orecast Exam le Business Business Revenue Ex enses Varia$le )osts

Ex ected Results 0 Business Valuation Model Excel )urrent 5ear 1..,... Materials ? Su lies 104000 2 08 2004000 70 08 504000 10 08 204000 7 08 104000 2 08 204000 7 08 /2.,... ,3".> 2-.,... /6".> ,2"/> 704000 9 08 :04000 6 08 504000 10 08 104000 2 08 0 0 08 0 0 08 2/.,... 3,".> 44.,... 3peratin$ 'urplus 8 ,.,... 23".> 23.,... 34".> 5ear 2 1,.,,6. 1147:1 2 08 22247=9 :9 =8 79469= 9 98 214==7 : 98 10499= 1 98 214==7 : 98 //6,.42 ,."/> 333,,//-"=> ,1"-> 714217 = 78 :04910 5 58 51451= 9 28 104:0: 1 98 0 0 08 0 0 08 2//,-44 3/"-> 4=2,-61 66,,-1 21"6> 246,,-1 3,"1> 5ear 3 166,=24 12400: 2 08 2294096 :9 98 514257 9 =8 214==7 : =8 10499= 1 98 214==7 : =8 /4,,==6 16"-> 342,-/, 42"2> ,-"6> 714==7 = 18 :04=16 5 28 524=:0 9 08 104576 1 98 0 0 08 0 0 08 2/1,=,, 3/"2> 463,144 2.,,2=. 26".> 2,=,-=. 36"1> 1:4057 614900 -/,221 15 98 /="1> e 9rou " 5ear / ,31,23124=75 2 08 2594707 71 :8 574160 9 =8 2:4121 : =8 114560 1 98 2:4121 : =8 /6/,223 ,2"/> 343,.2= /6"=> ,/"3> 72450: 6 98 294=67 7 98 5:4679 9 68 104=:0 1 =8 0 0 08 0 0 08 2/,,,41 32"-> 12-,=1= 2.1,/=3 2,"-> 2=.,3,3 3="3> 1:4292 674990 -3,.-. 17 =8 /=".> / 5ear (vera'e 1-2,1.= 23,.,. 2 08 3/,,,1, 70 08 12,=.4 9 =8 33,33/ : 98 22,222 1 98 33,33/ : 98 /11,-== ,."3> 3/1,1/2 /-"6> ,,"3> 42,6/. = 18 /.,4,/ 5 28 13,,/3 9 98 2.,13, 1 98 . 0 08 . 0 08 2/1,413 33"-> 4-2,432..,.=2,"-> 2,3,/.3="4> 2/,.=3 ,3,3/. 6=,..= 17 =8 /1".>

8 #evenue La$or excludin' Owner 8 #evenue La$or Owner 8 #evenue ;istri$ution 8 #evenue Mar!etin' 8 #evenue Ot%er 8 #evenue #otal Varia$le )osts Total Variable *osts 8 9ross &rofit -ross 6rofit 8 5ar)-up 2;uivalent Location 8 #evenue (dministration 8 #evenue La$or excludin' Owner 8 #evenue La$or Owner 8 #evenue Interest )osts 8 #evenue Ot%er 8 #evenue #otal <ixed )osts Total /i(ed *osts 8 #otal Ex enses O eratin' Sur lus Owner )as% <low 3!ner *ash /lo! 8

<ixed )osts

LESS ;e reciation (llowance 124500 1249=9 Owners External Earnin' &ower 604000 604000 Business Return 4=,1.. =1,621 Return on Sales 9 58 1: 58 #otal Investment 346,1-2 Return on #otal Investment 2-"2> /."1> )o yri'%t 7 www"$i8 e online"com a mem$er of t%e Bi8

O timistic <orecast im roved $y Exam le Business Business Revenue Ex enses Varia$le )osts

O timistic Results 0 Business Valuation Model Excel 3.> )urrent 5ear 1..,... 5ear 2 1=-,,66 114=50 2 08 2:041=0 :9 =8 794602 9 68 224:92 : 98 114191 1 98 224:92 : 98 /4=,4== 1-"-> 3/3,322 4."2> ,,"6> 714597 = 28 :14195 5 78 514992 9 08 104:99 1 98 0 0 08 0 0 08 2/1,26. 3/"/> 463,,1, -=,./2 2,"=> 21=,./2 3="2> 5ear 3 ,24,4,124::9 2 08 2:54:21 :9 :8 514166 9 :8 224:92 : 68 114191 1 98 224:92 : 68 /14,==1="=> 31-,,-. 43"/> =/"3> 724299 6 98 :049=7 5 08 5:41=1 9 =8 1046:7 1 =8 0 0 08 0 0 08 2/=,.,33"/> 4-2,646 233,,32 3.".> 264,432 /.".> 5ear / ,,.,/,/ 1:4259 2 08 2654969 70 :8 5742:0 9 28 27405: : 68 12402= 1 98 27405: : 68 /-/,1-3 1-",> 3,,,==2 4."4> ,="6> 7:420= 6 58 294955 7 58 5:4:01 9 18 104660 1 68 0 0 08 0 0 08 2/=,.3/ 3."=> 1/.,,21 23-,=46 2-",> 2-4,,/6 3-"1> 1:4502 6:4999 22=,3/6 1= 98 4="3> / 5ear (vera'e ,26,2=/ 23,442 08 34/,63. :9 78 12,,,, 9 78 33,-/: =8 22,4,1 98 33,-/: =8 /,1,36/ 1-"2> 313,6-. 4."-> ,-"3> 43,/,/ 6 98 /.,,=1 5 08 13,632 9 58 2.,1,4 1 =8 . 0 08 . 0 08 2/,,434 33"2> 1.2,=., 22,,4,= 26"6> 2=6,,-= 36"-> 2/,3/,2,==2./,,=16 98 42"=>

Materials ? Su

lies

8 #evenue La$or excludin' Owner 8 #evenue La$or Owner 8 #evenue ;istri$ution 8 #evenue Mar!etin' 8 #evenue Ot%er 8 #evenue #otal Varia$le )osts Total Variable *osts 8 9ross &rofit -ross 6rofit 8 5ar)-up 2;uivalent Location 8 #evenue (dministration 8 #evenue La$or excludin' Owner 8 #evenue La$or Owner 8 #evenue Interest )osts 8 #evenue Ot%er 8 #evenue #otal <ixed )osts Total /i(ed *osts 8 #otal Ex enses O eratin' Sur lus 3peratin$ 'urplus 8 Owner )as% <low 3!ner *ash /lo! 8

<ixed )osts

104000 2 08 2004000 70 08 504000 10 08 204000 7 08 104000 2 08 204000 7 08 /2.,... ,3".> 2-.,... /6".> ,2"/> 704000 9 08 :04000 6 08 504000 10 08 104000 2 08 0 0 08 0 0 08 2/.,... 3,".> 44.,... ,.,... 23".> 23.,... 34".>

LESS ;e reciation (llowance 124500 124999 1:4215 Owners External Earnin' &ower 604000 604000 614770 Business Return 4=,1.. 64,.// 2.-,=,, Return on Sales 9 58 17 58 1= 98 #otal Investment 346,1-2 Return on #otal Investment 2-"2> //"6> 44"3> )o yri'%t 7 www"$i8 e online"com a mem$er of t%e Bi8 e 9rou "

&essimistic Results 0 Business Valuation Model Excel &essimistic <orecast de'raded $y 3.> Exam le Business )urrent 5ear Business Revenue Ex enses Varia$le )osts Materials ? Su lies 8 #evenue La$or excludin' Owner 8 #evenue La$or Owner 8 #evenue ;istri$ution 8 #evenue Mar!etin' 8 #evenue Ot%er 8 #evenue #otal Varia$le )osts Total Variable *osts 8 9ross &rofit -ross 6rofit 8 5ar)-up 2;uivalent Location 8 #evenue (dministration 8 #evenue La$or excludin' Owner 8 #evenue La$or Owner 8 #evenue Interest )osts 8 #evenue Ot%er 8 #evenue #otal <ixed )osts Total /i(ed *osts 8 #otal Ex enses O eratin' Sur lus 3peratin$ 'urplus 8 Owner )as% <low 3!ner *ash /lo! 8 1..,... 104000 2 08 2004000 70 08 504000 10 08 204000 7 08 104000 2 08 204000 7 08 /2.,... ,3".> 2-.,... /6".> ,2"/> 704000 9 08 :04000 6 08 504000 10 08 104000 2 08 0 0 08 0 0 08 2/.,... 3,".> 44.,... ,.,... 23".> 23.,... 34".> 5ear 2 143,.61 11411= 2 18 2174900 :9 68 794=90 9 28 2141=5 : 98 104599 2 08 2141=5 : 98 /36,=41 ,.",> 32/,/4. /-"4> ,4"-> 704972 = 58 :046:1 5 =8 514052 9 78 104210 1 98 0 0 08 0 0 08 2/3,=/, 34"1> 4,2,46. 6.,,.1 24"-> 24.,,.1 31"-> 5ear 3 1,/,=,6 1146=: 2 18 2224990 :9 58 514::9 9 18 2141=5 : 98 104599 1 98 2141=5 : 98 //6,6/. ,."2> 334,-//-"-> ,,"4> 7142=5 = :8 :04769 5 78 524:05 9 :8 104761 1 98 0 0 08 0 0 08 2/4,122 3/"-> 4=/,/4. -.,436 2,".> 213,336 3=".> 124999 624160 ==,2=. 1: =8 /2".> e 9rou " 5ear / 1-2,4-1 12427= 2 18 250499: 72 78 574095 9 18 22421= : 98 114109 1 98 22421= : 98 /=3,=1, ,/".> 326,=//=".> 16"=> 7149:0 = 18 294691 5 08 57402= 9 18 104905 1 98 0 0 08 0 0 08 2/,,/1/ 3/"2> 1.-,2.63,/6, 2/"-> 24=,3=, 34"-> 1:40=2 654990 ,6,/24 11 58 3="1> / 5ear (vera'e 1,1,=6/ 22,,=2 18 33-,114 70 68 12,=/6 9 18 32,133 : 98 2.,=,2 1 98 32,133 : 98 /4,,=== ,2"/> 32-,.., /6"=> ,/"3> 42,/2, = :8 /.,3,4 5 :8 13,4,3 9 :8 2.,4-3 1 98 . 0 08 . 0 08 2/4,1// 3/"6> 462,/2. 64,4=/ 24"-> 24,,=./ 31"-> 23,-22 ,3,,6/ =2,2.6 12 68 36",>

<ixed )osts

LESS ;e reciation (llowance 124500 124=6: Owners External Earnin' &ower 604000 604000 Business Return 4=,1.. ,=,643 Return on Sales 9 58 12 58 #otal Investment 346,1-2 Return on #otal Investment 2-"2> 3="/> )o yri'%t 7 www"$i8 e online"com a mem$er of t%e Bi8

<orecast Revenue
=004000 6004000 5004000

Exam le Business

Revenue

7004000 :004000 2004000 1004000 0

*urrent <ear <ear 1 <ear 2 <ear :

5ear

<orecast ReturnExam le Business

1704000 1204000 1004000

Return

904000 604000 704000 204000 0

*urrent <ear <ear 1 <ear 2 <ear :

5ear

O eratin' Sur lus Ex ected Exam le Business

=004000 6004000 5004000 7004000 :004000 2004000 1004000 0
*urrent <ear <ear 1 <ear 2 <ear :

O eratin' Sur lus ? )osts

5ear

Sur lus ? Return > Ex ected Exam le Business

70 08

&ercenta'e on Sales or Investment

:5 08 :0 08 25 08 20 08 15 08 10 08 5 08 0 08
<ear 1 *urrent <ear <ear : <ear 2

5ear

Outline

Instructions 0 Business Valuation Model Excel Overview The Business Valuation 5odel is desi$ned to provide an economical4 efficient and effective means to assess the value of a business The forecast input should be based on your subDective vie!s These are translated into ;uantifiable values for model operation There is no need to provide LperfectL ans!ers Kse your industry )no!led$e to ma)e informed estimates The $oal is to provide a streamline tool to indicate possible outcomes " recent business ta(ation return !ill assist in determinin$ values for the 6erformance section The Business Valuation 5odel combines #elative &ndicators for future performance !ith basic financial data I#evenue4 Variable *osts4 and /i(ed *ostsJ to value the business This valuation method can be used for business purchase4 sale4 or establishment &t is compact4 easy to use4 and re;uires minimal inputs 3utputs include a : <ear /orecast4 'ensitivity "nalysis4 &nvestment #eturn4 and calculated Business Valuation in tabular and $raphical form

/or ;uestions4 su$$estions4 support or additional business soft!are please visit: http:..!!! bi,peponline com. In ut "ll input is on the &nput H "nalysis 'heets *lic) the tab or hyperlin)s to access Blue cells allo! input )urrent O eratin' This section revie!s the current performance of your business for a full year period &t is desi$ned &erformance ;ata to assess the level of e(penses that vary !ith your sales IVariable *ostsJ and those that donMt I/i(ed *ostsJ &t also allocates a realistic labor cost for the o!ners effort The focus is on cash flo! e(cludin$ assets and ta(ation Broad e(pense cate$ories are provided 1abels in blue cells can be adDusted ho!ever they should reflect the ori$inal label type to ensure formula are applied correctly Values can be based on the previous years ta( return adDusted for current tradin$ &nputs do not have to be perfect but should reasonably reflect business operation Business 0ame or &dentifier Business Revenue Ex enses Varia$le )osts 5aterials H 'upplies 1abor e(cludin$ 3!ner 1abor 3!ner &nput a name for the business This appears as an identifier on the 3utput 'heets &nput the #evenue $enerated by the business for the current year 'elect your 2(pense input as 5onetary or 6ercent This allo!s you to input your 2(penses directly in 5onetary I%ollars4 6ounds etcJ or 6ercenta$e terms Variable *osts vary !ith the volume of product or service you provide 3nly include these costs in this section and allocate them into one of the si( cate$ories &nput the annual variable e(pense for materials and supplies directly related to producin$ your product or providin$ your service &nput the annual variable e(pense for labor Ie(cludin$ the o!nerJ directly related to producin$ your product or providin$ your service 1abor e(penses should include all associated on-costs and &nput the annual value of labor provided by the o!ner that is directly related to producin$ your product or providin$ your service This variable e(pense should reflect the effective labor effort and can be estimated as the cost of an employee !ho could replace the o!ner 1abor e(penses should include all associated on-costs and benefits &nput the annual variable e(pense for distribution of your product or service This may include frei$htthe costs4 pac)a$in$4 and vehiclefor runnin$ costs &nclude advertisin$4 promotional publications4 &nput annual variable e(pense mar)etin$ sponsorships4 client functions4 and any mar)etin$ or sales e(pense 5ar)etin$ is not essentially a variable e(pense4 ho!ever it is assumed that mar)etin$ does influence the level of sales and a relationship e(ists bet!een the level of mar)etin$ and the level of sales &t is on this basis that it forms a component of Variable *osts &nput any annual variable e(penses not already accounted for This is the sum of the variable e(penses &t is e(pressed as a monetary value and as a percenta$e of revenue /i(ed *osts are e(penses !hich remain constant Iup to a pointJ !hile the volume of sales vary 3nly include these costs in this section and allocate them into one of the si( cate$ories &nput the annual fi(ed location e(pense &nclude rent4 po!er and li$ht4 maintenance4 buildin$ insurance4 security4 and cleanin$ &f you o!n the property do not include purchase or finance &nput the annual fi(ed administration e(pense &nclude office phone4 e;uipment costs4 and &nput the annual fi(ed labor e(pense Ie(cludin$ o!nerJ This should include any labor e(pense not already accounted for in variable costs 1abor e(penses should include all associated oncosts and benefits

)ontact ;etails

%istribution 5ar)etin$

3ther #otal Varia$le )osts <ixed )osts 1ocation "dministration 1abor e(cludin$ 3!ner

1abor 3!ner

&nterest *osts

&nput the annual value of fi(ed cost labor provided by the o!ner This should include the value of any labor !hich has not already been accounted for in variable costs This fi(ed e(pense should reflect the effective labor effort and can be estimated as the cost of an employee !ho could replace the o!ner 1abor e(penses should include all associated on-costs and benefits &nput the annual fi(ed &nterest *ost &nclude only the interest component of loan repayments 6rinciple components reflect assets &t is recommended that the business initially be valued !ith no /inance or &nterest component i e 1008 e;uity This ensures the valuation provides the re;uired return on the Total &nvestment 3nce you have established valuation details you can then insert /inance details to determine the impact on the business &nput any annual fi(ed e(penses not already accounted for This is the sum of the fi(ed e(penses &t is e(pressed as a monetary value and as a percenta$e of revenue 3peratin$ 'urplus reflects the before ta( operatin$ profit.loss of the business for the full years tradin$ &t is calculated as the #evenue less Total Variable *osts less Total /i(ed *osts &t e(cludes asset investment "ssets include property4 e;uipment4 and capital reinvestment in the business These investment components are considered in the &nvestment section The 3peratin$ 'urplus represents the day to day Ishort termJ business performance 3!ner *ash /lo! is the 3peratin$ 'urplus plus the value of any 1abor provided by the 3!ner &f the o!ner provides no labor for the business 3!ner *ash flo! and 3peratin$ 'urplus !ill be This section considers factors that influence future business performance " relative indicator is used to reflect unit chan$es in these factors The base year relative indicator for each factor is defined as 1008 #elative indicators for each of the ne(t three years are applied to reflect li)ely chan$es in the unit cost or stren$th of the factor 2ach indicator is relative to the prior year " 108 increase from the previous year is reflected by a relative indicator of 1108 " 108 decrease from the previous year is reflected by a relative indicator of 908 #elative indicators for costs reflect chan$es in the base unit of the e(pense such as labor costs per hour or material costs per unit #elative &ndicators are re;uired for each factor for <ears 1 to : &f there is no chan$e from the previous year the #elative &ndicator is 1008 <ou have provided #evenue and *osts details for the current <ear <ear 1 is the year follo!in$ the *urrent <ear4 <ear 2 follo!s <ear 14 and <ear : follo!s <ear 2 &nput the percenta$e relative indicator to reflect the level of chan$e from the previous year *onsider the number of competitors4 competitor strate$ies4 potential ne! entrants This indicator has an inverse relationship to forecast Business #evenue "ll thin$s bein$ e;ual as the level of competition increases Business #evenue decreases &nput the percenta$e relative indicator to reflect the level of chan$e from the previous year *onsider mar)et $ro!th4 technolo$y H re$ulatory impacts and customer needs 5ar)et stren$th is an indicator of the demand for the type of product or service you provide This indicator has a direct relationship to forecast Business #evenue "ll thin$s bein$ e;ual as mar)et stren$th increases Business #evenue increases &nput the percenta$e relative indicator to reflect the level of chan$e from the previous year *onsider the potential chan$es in supplier pricin$4 sources of supply4 your bar$ainin$ po!er4 demand for materials4 and possible alternative materials This indicator has a direct relationship to forecast 5aterials H 'upplies e(penses "ll thin$s bein$ e;ual as the unit cost of materials and supplies increases this Variable *ost e(pense increases &nput the percenta$e relative indicator to reflect the level of chan$e from the previous year *onsider mar)et forces and availability of s)illed staff This indicator has a direct relationship to forecast Variable and /i(ed *ost 1abor e(cludin$ 3!ner4 and 1abor 3!ner e(penses "ll thin$s bein$ e;ual as the unit labor costs increase these labor e(penses increase &t is also used to determine future 3!ners 2(ternal 2arnin$ 6o!er &nput the percenta$e relative indicator to reflect the level of chan$e from the previous year This is percenta$e chan$e not actual values /or a current interest rate of 68 a relative indicator of 1108 in <ear 1 e;uates to 6 684 a relative indicator of 1108 in <ear 2 ta)es this to = 268 This indicator has a direct relationship to forecast &nterest e(penses "ll thin$s bein$ e;ual as interest rates increase this Variable *ost e(pense increases

3ther #otal <ixed )osts O eratin' Sur lus

Owner )as% <low <orecast ;ata

#elative &ndicator 1evel of *ompetition

5ar)et 'tren$th

5aterials H 'upplies *osts

1abor *osts

&nterest #ates

Business 5ar)et 6osition

Variable *osts 2fficiency

/i(ed *osts 2fficiency

/i(ed *osts /lo!-on

Valuation ;ata

&nput the percenta$e relative indicator to reflect the level of chan$e from the previous year *onsider your position in the mar)et4 and the impact of your current actions This is a measure of your standin$ relative to the competition as perceived by potential consumers &f thin$s !ill remain much the same input 10084 indicatin$ no chan$e over the previous year &f you have actions to improve the position of your business by 108 then the input !ould be 1108 This indicator has a direct relationship to forecast Business #evenue "ll thin$ bein$ e;ual as mar)et position increases Business #evenue increases "ctions contributin$ to the business position must be substantiated and implemented to have an impact &nput the percenta$e relative indicator to reflect the level of chan$e from the previous year This should reflect chan$es in the relationship bet!een your Variable *osts and revenue &f you have actions to improve your Variable *osts efficiency Idecrease variable costsJ by 108 over the previous year input 1108 *onsider chan$es in processes4 distribution or the materials used This indicator has an inverse relationship to forecast Variable *osts 5aterials H 'upplies4 1abor e(cludin$ 3!ner4 1abor 3!ner4 %istribution4 5ar)etin$ and 3ther e(penses "ll thin$s bein$ e;ual as Variable *osts 2fficiency increases less materials4 labor4 distribution and mar)etin$ resources are re;uired resultin$ in a decrease in these e(penses "ctions must be substantiated and implemented to have an impact &nput the percenta$e relative indicator to reflect the level of chan$e from the previous year *onsider chan$es in administration processes and /i(ed *ost labor re;uirements This indicator has an inverse relationship to forecast /i(ed *osts "dministration4 1abor e(cludin$ 3!ner4 1abor 3!ner4 and 3ther e(penses "ll thin$s bein$ e;ual as /i(ed *osts efficiency increases less administration and labor resources are re;uired resultin$ in a decrease in these e(penses &t does not apply to 1ocation and /inance e(penses "ctions contributin$ to the business position must be substantiated and implemented to have an impact <ou can use the %ecision "ssistant 5odel to value your actions and determine their business impact4 this is available from the bi,peponline com !eb site &nput the percenta$e /i(ed *osts /lo!-on This indicates the estimated level of fi(ed costs adDustment to support revenue variations /i(ed *osts are $enerally considered a constant e(pense4 ho!ever lar$e sustained revenue variations place pressure on fi(ed costs and usually result in an increased fi(ed cost e(pense This may include lar$er floor area4 more administration costs4 or hi$her financin$ The /i(ed *osts /lo!-on percenta$e is the amount of increase in /i(ed *osts e(pense for a 1008 increase in revenue "n fi(ed costs flo!-on of 208 reflects a 208 increase in /i(ed *osts e(pense for every 1008 increase in revenue This indicator has a direct relationship to all forecast /i(ed *ost e(penses This section provides data to value the business *onsideration is $iven to the o!ners earnin$ po!er outside the business4 the replacement value of business assets and their useful life 6roperty I#eal 2stateJ valuations are considered constant throu$hout the period "nnual replacement costs for other business assets are calculated as the #eplacement Value divided by the "sset 1ife This provides for constant reinvestment to maintain the business This data is combined !ith the business forecast to determine a business valuation &nput the percenta$e of !or) time the o!ner commits to the business This is used to determine the o!ners return for effort and indicates the available amount of o!ner resource "vailable resource !ill be applied to any forecast labor increase in /i(ed4 then Variable *osts !here the o!ner currently contributes &nput the annual income the o!ner could earn if employed outside the business &nclude any benefits The actual return from the business must compensate the o!ner for $ivin$ up 2(ternal 2arnin$s and provide the re;uired return on &nvestment " return on &nvestment only occurs after the o!ner has been compensated for 2(ternal 2arnin$s $iven up &nput the replacement value of physical business assets 2(clude property *onsider vehicles4 plant and e;uipment This forms a component of the total business investment &nput the avera$e life of the assets The #eplacement Value of Business "ssets !ill be divided by the 1ife of "ssets to provide an indication of annual asset depreciation e(pense This !ill be used in determinin$ the o!ners return from the business &nput the estimated mar)et value of property o!ned by the business 6roperty values are considered stable over the forecast period and no depreciation is allo!ed for This forms a component of the total business investment This is the calculated value of any other investment made in the business &t consits of operatin$ capital and $ood!ill This forms a component of the total business investment This amount !ill be adDusted in-line !ith your Valuation "nalysis The Total &nvestment in the business is the calculated 2(pected Valuation &t is the sum of #eplacement Value of Business "ssets4 5ar)et Value of 6roperty4 and 3ther &nvestment in

3!ners Time *ommitment to Business 3!ners 2(ternal 2arnin$ 6o!er

#eplacement Value of Business "ssets 1ife of "ssets IyearsJ 5ar)et Value of 6roperty 3ther &nvestment in Business #otal Investment

/inanced "mount

E@uity Investment Sensitivity (nalysis 3ptimistic &nput 6essimistic &nput Business #evenue 3ptimistic 2(pected 6essimistic 3peratin$ 'urplus 3!ner *ash /lo! Business #eturn

This is the amount of finance carried by the business &t is recommended that the business initially be valued !ith no /inance or &nterest component i e 1008 e;uity This ensures the valuation provides the re;uired return on the Total &nvestment 3nce you have established a valuation you can then insert /inance details to determine the impact on the business The calculated &nterest #ate is based on the /inanced "mount and the annual &nterest *ost from the 6erformance %ata 0o principle reduction is considered durin$ the forecast period4 only interest e(pense4 principle components reflect annual assets #eturn on Total &nvestment over a three year period This is the avera$e 'ensitivity "nalysis allo!s you to adDust your #elative &ndicators by a set percenta$e to $enerate 3ptimistic and 6essimistic /orecasts &nput the percenta$e improvement in #elative &ndicators to $enerate an 3ptimistic /orecast &f you feel it is Lreasonably li)elyL your #elative &ndicators are 208 too lo!4 input 208 &nput the percenta$e de$rade in #elative &ndicators to $enerate a 6essimistic /orecast &f you feel it is Lreasonably li)elyL your #elative &ndicators are 208 too hi$h4 input 208 This is the forecast revenue $enerated by the business This is the forecast based on your 3ptimistic improvement to #elative &ndicators This is the forecast based on the #elative &ndicators you provided as input This is the forecast based on your 6essimistic de$radation of #elative &ndicators This is the #evenue less Variable and /i(ed *osts includin$ payment to the o!ner for labor This is the 3peratin$ 'urplus plus any labor 2arnin$s of the 3!ner Business #eturn is the 3!ners *ash /lo! less a %epreciation "llo!ance and 3!ners 2(ternal 2arnin$ 6o!er " %epreciation "llo!ance is re;uired for the lon$ term maintenance of the business &t is calculated as the #eplacement Value of Business "ssets divided by the "sset 1ifetime &f the %epreciation "llo!ance is not reinvested business performance and value !ill decrease The 3!ners 2(ternal 2arnin$ 6o!er reflects the income $iven up by the o!ner to !or) in the business This must be recouped throu$h the business before there is any return on investment $enerated 'imply input your desired #eturn on &nvestment to calculate your Business Valuation &f you have applied 'ensitivity "nalysis : valuations !ill be calculatedG 3ptimistic4 2(pected4 and 6essimistic This is the Business #eturn as a percenta$e of the Total &nvestment &t is an indicator of the ;uality of the business investment The hi$her the #eturn on &nvestment the better the investment Ao!ever as the level of ris) increases a hi$her #eturn on &nvestment is re;uired to compensate for the ris) ta)en Business #eturn is the 3!ners *ash /lo! less a %epreciation "llo!ance and 3!ners 2(ternal 2arnin$ 6o!er

Valuation (nalysis 8 #eturn on Total &nvestment

#e;uired #eturn on &nvestment This is the Business #eturn as a percenta$e of the Total &nvestment &t is an indicator of the ;uality of the business investment The hi$her the #eturn on &nvestment the better the investment Ao!ever as the level of ris) increases a hi$her #eturn on &nvestment is re;uired to compensate for the ris) ta)en Business #eturn is the 3!ners *ash /lo! less a %epreciation "llo!ance and 3!ners 2(ternal 2arnin$ 6o!er 2(pected Valuation This Valuation is based on the 2(pected /orecast and the re;uired avera$e : <ear #eturn on &nvestment &t represents the Total &nvestment in the business and is an indication of 'ale or 6urchase price Based on the 2(pected /orecast this is the ma(imum &nvestment that should be applied to this business to achieve the re;uired #eturn on &nvestment This represents the 3ptimistic Valuation Ihi$hJ &t provides the re;uired avera$e : <ear #eturn based on the 3ptimistic /orecast Ao!ever if the business does not provide a return inline !ith the 3ptimistic forecast the return on &nvestment !ill be less than re;uired at this valuation This represents the 6essimistic Valuation Ilo!J &t provides the re;uired avera$e : <ear #eturn based on the 6essimistic /orecast &f the business provides a return $reater than the 6essimistic forecast the return on &nvestment !ill e(ceed that re;uired at this valuation

3ptimistic Valuation 6essimistic Valuation

Out ut S%eets 'ummary outputs are included on the 'ensitivity and Valuation "nalysis 'heets %etails are in tabular form on the #esults 'heets and $raphical form on the *hart 'heets To display 'heets clic) the re;uired sheet tab 'ensitivity "nalysis 'ensitivity "nalysis allo!s you to adDust your #elative &ndicators by a set percenta$e to $enerate 3ptimistic and 6essimistic /orecasts Valuation "nalysis 'imply input your desired #eturn on &nvestment to calculate your Business Valuation &f you have applied 'ensitivity "nalysis : valuations !ill be calculatedG 3ptimistic4 2(pected4 and 6essimistic 2(pected #esults /ull tabular results for your 2(pected /orecast and #eturn on &nvestment 3ptimistic #esults /ull tabular results for your 3ptimistic /orecast and #eturn on &nvestment 6essimistic #esults /ull tabular results for your 6essimistic /orecast and #eturn on &nvestment

/orecast #evenue *hart /orecast #eturn *hart 3peratin$ 'urplus *hart 'urplus H #eturn *hart

: <ear /orecast #evenue *hartG 3ptimistic4 2(pected and 6essimistic : <ear /orecast #eturn *hartG 3ptimistic4 2(pected and 6essimistic #eturn is the 3!ners *ash /lo! less the %epreciation "llo!ance and 3!ners 2(ternal 2arnin$ 6o!er : <ear 2(pected 3peratin$ 'urplus *hart includin$ Variable and /i(ed *osts : <ear 2(pected 3peratin$ 'urplus on 'ales4 #eturn on 'ales4 and #eturn on Total &nvestment percenta$es )o yri'%t 7 www"$i8 e online"com a mem$er of t%e Bi8 e 9rou "

#erms and )onditions

Business Valuation Model Excel

Version: ,. 0 Build: 3.2..-31 Software License:

Not Licensed, for Evaluation Only

In Evaluation Mode Business Revenue a lied is loc!ed and not calculated" #o fully ena$le t%is software it must $e licensed"

5ou can also try our we$ $ased Business Valuation Software at:
http:..!!! businesssoft!aremana$ement com.Bitem?Business-Valuation-'oft!are
&t is free for evaluation and runs in your bro!ser !ith no do!nload re;uired

2" Outline The Business Valuation 5odel is desi$ned to provide an economical4 efficient and effective means to assess the value of a business The forecast input should be based on your subDective vie!s These are translated into ;uantifiable values for model operation There is no need to provide LperfectL ans!ers Kse your industry )no!led$e to ma)e informed estimates The $oal is to provide a streamline tool to indicate possible outcomes " recent business ta(ation return !ill assist in determinin$ values for the 6erformance section The Business Valuation 5odel combines #elative &ndicators for future performance !ith basic financial data I#evenue4 Variable *osts4 and /i(ed *ostsJ to value the business This valuation method can be used for business purchase4 sale4 or establishment &t is compact4 easy to use4 and re;uires minimal inputs 3utputs include a : <ear /orecast4 'ensitivity "nalysis4 &nvestment #eturn4 and calculated Business Valuation in tabular and $raphical form 3" Sco e *onditions of use apply to all Bi,pep services4 soft!are4 and information presented They cover all Bi,pep principles4 employees4 distributors and other associated parties Kse ac)no!led$es acceptance /ull copyri$ht is maintained by Bi,pep /" Evaluation 'oft!are is provide free for 2valuation &n 2valuation 5ode e(ample Business #evenue data is applied in calculations #e$isterin$ soft!are removes restrictions allo!in$ individual business revenue data to be applied &n re$istered soft!are all other features includin$ cell protection are the same as in evaluation soft!are "ll non-input cells remain protected to ensure the inte$rity of the formula /or soft!are re$istered !ith a )ommercial License a soft!are version !ith unprotected calculation sheets can be re;uested allo!in$ you to vie! the underlyin$ formula and underta)e minor refinements 4" Install A *ninstall 'oft!are is an (ls file developed !ith 5icrosoft 2(cel and !ill run on all versions of 5icrosoft 2(cel and most other spreadsheet applications includin$ 2(cel for 5acs and the free open source 3pen3ffice spreadsheet &t is secure and safe4 it does not include any macros or visual basic codin$ and cannot access your system in any !ay &f soft!are is do!nloaded as an (ls file I!ith a (ls e(tensionJ you can simply save it to your local system and then open the (ls file usin$ your spreadsheet pro$ram I2(cel4 3pen 3ffice etcJ &f soft!are is do!nloaded as a standard *ompressed Nip file I!ith a ,ip e(tensionJ it re;uires un,ippin$ for use Kn,ip the do!nloaded file and saved the content (ls file to your local system Then open the (ls file usin$ your spreadsheet pro$ram I2(cel4 0o system files are chan$ed !hen you use this soft!are To uninstall simply delete the files 1" &urc%ase 6ayment is online at: %tt :AAwww"$i8 e online"comABusinessValuationRe'"%tml Kpon receipt of payment Bi,pep !ill provide by return email re$istration details to maintain the soft!are and enable all inputs #e$isterin$ soft!are removes restrictions allo!in$ individual business revenue data to be applied &n re$istered soft!are all other features includin$ cell protection are the same as in evaluation soft!are "ll non-input cells remain protected to ensure the inte$rity of the formula /or soft!are re$istered !ith a *ommercial 1icense a soft!are version !ith unprotected calculation sheets can be re;uested allo!in$ you to vie! the underlyin$ formula and underta)e minor refinements ," License Num$er of Licenses

The number of licenses you purchase is the ma(imum 0umber of Ksers and the ma(imum 0umber of *omputer 'ystems the purchased soft!are can be installed on or that can access the soft!are if on a net!or) &f you purchase a sin$le user license IOuantity set to 1J the soft!are must only be accessible from one computer and there must only be one user To run the soft!are on more than one computer4 a net!or)4 or provide for additional users you must purchase a 5ulti-user license by settin$ the purchase ;uantity to the re;uired number of user licenses Multi0user licenses attract a /.> discount" Non0)ommercial License This license is for non-commercial private and internal business use only &t does not cover the commercial use of soft!are for inter-business support4 advice4 or consultin$ #e$isterin$ soft!are removes restrictions allo!in$ individual business revenue data to be applied &n re$istered soft!are all other features includin$ cell protection are the same as in evaluation soft!are "ll non-input cells remain protected to ensure the inte$rity of the formula )ommercial License This license allo!s the commercial use of soft!are for inter-business support4 advice4 or consultin$ #e$isterin$ soft!are removes restrictions allo!in$ individual business revenue data to be applied &n re$istered soft!are all other features includin$ cell protection are the same as in evaluation soft!are "ll non-input cells remain protected to ensure the inte$rity of the formula /or soft!are re$istered !ith a *ommercial 1icense a soft!are version !ith unprotected calculation sheets can be re;uested allo!in$ you to vie! the underlyin$ formula and underta)e minor refinements Source License This license allo!s you to access and modify all soft!are code includin$ macros /or additional details please submit your re;uest !!! bi,peponline com.*ontactKs html =" Software Su ort

Bi,pep offer support for operation and application of re$istered soft!are 'imply submit your support re;uest at: !!! bi,peponline com.*ontactKs html 6" Intellectual &ro erty Bi,pep retain all intellectual property ri$hts &t is prohibited to use the soft!are4 concepts4 formats4 and systems obtained from Bi,pep in any manner outside their intended use as desi$ned and defined by Bi,pep <ou may not modify4 translate4 reverse en$ineer4 decompile4 disassemble or create derivative !or)s based on Bi,pep soft!are4 services or concepts -" Bold Barmless Bi,pep provide tools to support business The specific suitability of these tools must be independently assessed 'ervices includin$ soft!are4 concepts4 formats4 and systems are provided as is and !ith no !arranties of any )ind4 !hether e(pressed or implied The user must assume the entire ris) of usin$ Bi,pep soft!are or services4 and a$rees to hold Bi,pep harmless from any claims or losses relatin$ to service or soft!are use &n no event shall Bi,pep4 its principals4 distributors4 employees4 or other associated parties4 be liable for any incidental4 conse;uential4 or punitive dama$es !hatsoever relatin$ to soft!are or service use &n addition use of soft!are and services is entirely at the users ris)4 and use ac)no!led$es that Bi,pep is held harmless from any claims or losses relatin$ to soft!are or services provided 2." ;istri$ution <ou may freely distribute this soft!are in 2valuation form !ithout #e$istration *odes "ny soft!are distributed must re;uire the user to provide payment to Bi,pep to maintain the soft!are as ori$inally desi$ned <ou may not sell or re;uire payment in any form for Bi,pep soft!are 2valuation soft!are must be distributed !ithout cost or penalty to the user "ll ri$hts of any )ind !hich are not e(pressly $ranted are entirely and e(clusively reserved to and by Bi,pep 22" )ontact ;etails /or soft!are support and to contact us please submit your re;uest at: !!! bi,peponline com.*ontactKs html "dditional business support soft!are and online help are available at: !!! bi,peponline com )o yri'%t 7 www"$i8 e online"com a mem$er of t%e Bi8 e 9rou "