METHODOLOGY

Valuation Framework

Our structured approach combines advanced analytical techniques with powerful digital tools for precise, context-specific valuations.

Hadaly's Approach

Our valuation methodology is designed to provide reliable estimates of a company's value. Our framework combines advanced analytical techniques with powerful digital tools, enabling the production of precise and context-specific analyses.

Methodologies

Multiples Method

Compare your company to others in your industry using specific financial ratios.

This approach involves comparing the company to others within the same industry using specific financial ratios known as multiples. These multiples are calculated by relating particular financial metrics, such as EBITDA or revenue, to enterprise value.

Revenue Multiple Method

Estimates value by multiplying annual revenue by an appropriate multiple. Particularly useful for growth-phase companies.

EBITDA Multiple Method

Estimates value by multiplying annual EBITDA by an appropriate multiple. Widely used for comparing companies with different capital structures.

Discounted Cash Flow (DCF)

Estimate current value by discounting projected future cash flows.

The DCF method estimates the current value of a company by discounting its projected future cash flows using an appropriate discount rate, typically calculated through the Weighted Average Cost of Capital (WACC).

1
Projecting Free Cash Flows (typically 5-10 years)
2
Discounting the Cash Flows using WACC
3
Calculating the Terminal Value
4
Summing the Discounted Values

Equity Method

Evaluate company value by adjusting assets and liabilities to fair market value.

The equity method evaluates the company's value by adjusting the market value of its assets and liabilities to their fair market value. By subtracting total liabilities from the revalued total assets, the company's equity value is determined.

N.B. In all applicable valuation methods, a normalized EBITDA is used by subtracting all exceptional or discretionary expenses in order to better reflect the company's recurring operational performance.

Terms & Definitions

COGS
Direct costs associated with producing goods or services, such as raw materials and direct labor.
SG&A
General operational expenses such as marketing, management, and office costs.
Depreciation & Amortization
The accounting reduction of the value of long-term assets over their expected useful life.
EBITDA
Earnings before interest, taxes, depreciation, and amortization — commonly used to assess operational profitability.
EBIT
Profit generated from core operations, before deducting interest and taxes.
Net Income
The final amount earned after subtracting all expenses, including interest and taxes.
Current Asset
Assets expected to be converted into cash or used within one year.
Long-Term Asset
Resources used over several years, like buildings, land, or patents.
Current Liability
Obligations due within one year.
Long-Term Liability
Obligations due beyond one year, such as loans or bonds.

Abbreviations

CAPEXCapital Expenditure
Cap RateCapitalization Rate
CIMConfidential Information Memorandum
DCFDiscounted Cash Flow
EBITDAEarnings Before Interest, Taxes, Depreciation, and Amortization
EBITEarnings Before Interest and Taxes
EBTEarnings Before Tax
FCFFree Cash Flow
LTMLast Twelve Months
NBVNet Book Value
NOINet Operating Income
NTMNext Twelve Months
SG&ASelling, General, and Administrative Expenses
WACCWeighted Average Cost of Capital

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