Services / M&A

Business and company valuation for Italian SMEs

Services and guides

Understand the assumptions behind a value, before discussing a price

A business valuation estimates the value of an enterprise or an ownership interest for a defined purpose and date. It can support a company sale, an acquisition, a new investor, a shareholder transaction or business succession. An estimate should explain its data, methods and limits so that the parties can discuss it.

What we examine

We start with financial statements and management information, then review recurring profitability, cash generation, debt, liquidity and working capital. Customer concentration, management continuity, assets, contracts and the owner’s operational role help explain risks that cannot be read from one accounting number.

One-off income or costs may need adjustment. Each adjustment should have a reason and supporting evidence. Normalising EBITDA does not mean adding back every cost that reduces profit.

Valuation methods

  • Multiples: compare a consistent earnings measure with relevant transactions or businesses. An EBITDA multiple and a net-income multiple describe different measures and are not interchangeable.
  • Discounted cash flow: estimates depend on future cash flows, investment needs, funding assumptions and the discount rate.
  • Asset-based approaches: examine the assets and liabilities relevant to the business and to the purpose of the valuation.

The appropriate method depends on the company and the assignment. A loss-making company, a property business and a profitable trading business do not necessarily support the same approach.

Enterprise value and equity value

The value of the operating business differs from the value attributable to shareholders. Debt, cash and other agreed adjustments connect the two. Transaction terms can also change the amount and timing actually received by a seller.

From an initial estimate to an assessment

Our free business value simulator illustrates the effect of profitability, adjustments and an explicitly selected multiple. It provides an initial scenario, rather than a market offer or a valuation report. The guide how much is my company worth? explains the main drivers.

For an assessment, we agree the purpose, information required and deliverable. The resulting work sets out the methods, assumptions and sensitivities, and can be connected to M&A advisory or succession planning.

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