Financing of the transaction and creative deal structures play a critical role in BVX® valuations. In BVX® business value depends on financing, working capital requirements, capital expenditure needs, deal structure (specifically Asset vs. Stock purchase), purchase price allocation, and buyer synergy. BVX® provides simultaneous determination of: a) the Best Value for the Seller, b) the required Buyer Equity, c) the required Gap Funding (often called Seller Financing), and d) Mezzanine Warrants.
BVX® makes business valuation more objective, precise, and simple. It operates from one screen in an interactive manner. Its quickness can become an addiction to test various scenarios and develop insight into improving shareholder value. inputs are easily available and require no (or limited) guesswork. These inputs, which are limited to the ones that are most critical to the value of a typical business, have been chosen based on years of extensive analysis and market research. BVX® requires selected inputs from the following categories: a) Income Statement, b) Balance Sheet, c) Growth Assumptions, d) Financing, e) Deal Structure, f) Taxation, and g) Exit Strategy, and a few others.
BVX® determines value of 100% ownership interest in the business. It can be used for all types and sizes of businesses. BVX® determines the operating value of the business, which is often called the Enterprise Value or the Market Value of Invested Capital. Equity value of the business can be calculated by adjusting for the excluded non-operating assets, the non-operating liabilities, and the debt obligations.
BVX® is not a tool to determine cost of equity capital, and it is not a forecasting tool, nor a profit-recasting tool.
Business ValueXpress® uses a newly developed Iterative DCF method (Iterative Discounted Cash Flow method) that combines conventional DCF with iterations and optimization. BVX® derives its usefulness and simplicity by focusing on the few key aspects of valuation. BVX® results should be carefully reviewed with accountants, attorneys, valuation specialists and other M&A professionals.
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