Resource
Business valuation FAQ
The questions founders and deal teams ask most often before commissioning a valuation — answered the way they would be answered in a scoping call, without hedging.
Written by CA Pranay Bhansali, Founder & Principal, Volaxi — Chartered Accountant (ICAI), former senior buy-side research analyst.
Last reviewed September 2026 · LinkedIn
The Short Version
- What it answers
- What the business is worth, as a defensible range with stated method and assumptions.
- Core methods
- Discounted cash flow, trading comparables, precedent transactions — triangulated, not picked.
- Where value moves
- Normalised EBITDA, the forecast, and the enterprise-to-equity bridge.
- Indicative range
- Complimentary, returned within two business days of receiving financials.
- Full engagement
- Two to four weeks, written report a counterparty can review.
If you want a number before reading further, the business valuation calculator gives an indicative range in the browser, and a complimentary indicative valuation returns a written range prepared by a Chartered Accountant.
Questions
What is a business valuation?
A business valuation is a reasoned estimate of what an enterprise is worth, expressed as a range and supported by a stated method, a defined set of assumptions and the evidence behind them. In a transaction context it is not a single number but a defensible interval that a counterparty, a board or an auditor can test line by line.
Which valuation method should be used?
Most transaction valuations triangulate three approaches: a discounted cash flow, trading comparables of listed peers, and precedent transaction multiples. A profitable, predictable business is usually anchored on an EBITDA multiple and cross-checked with a DCF. A high-growth business with immature margins is anchored on the DCF or a revenue multiple. An asset-heavy or loss-making business may be valued on net asset value. The method follows the economics of the business, not the other way round.
What is the difference between enterprise value and equity value?
Enterprise value is the value of the operating business regardless of how it is financed. Equity value is what a shareholder receives: enterprise value less net debt and debt-like items, adjusted for any working capital shortfall against a normalised peg. The bridge between the two is where a material part of negotiated proceeds is decided.
How much does a business valuation cost?
Cost tracks scope. An indicative desktop range built from information you provide is complimentary at Volaxi. A full independent valuation — reconciled financials, normalised earnings, a built DCF and comparables set, and a written report a counterparty can review — is quoted per engagement after a short scoping conversation, based on the complexity of the business and the standard of evidence required.
How long does a valuation take?
An indicative range is typically returned within a few business days of receiving financials. A full engagement usually runs two to four weeks from information access to written report, depending on the quality of the underlying records and how many entities or segments are in scope.
What information is needed to value a business?
Three years of financial statements or management accounts, the current-year trading position, a debt and cash schedule, monthly working capital balances, a revenue breakdown by customer or product, and any forecast management already maintains. Where records are incomplete, the valuation is still possible — the range simply widens and the limitation is stated.
What is EBITDA normalisation and why does it change the answer?
Normalisation removes items that are not representative of ongoing trading — one-off legal costs, owner remuneration above market, related-party rent, discontinued lines — to arrive at the earnings a buyer would actually acquire. Because the price is a multiple of that number, an adjustment of a few percentage points of EBITDA moves headline value by a multiple of itself. It is the single most contested area of a valuation.
Is a free or online valuation reliable?
A calculator or a desktop range is reliable for orientation: it tells you the order of magnitude and which assumptions dominate the answer. It is not reliable as evidence in a negotiation, a dispute or a regulatory filing, because it has not tested the underlying earnings. Use an indicative range to decide whether the conversation is worth having, and a full engagement when a counterparty will examine the work.
What do buyers actually test in a valuation?
Sustainable earnings first, then the bridge. Buyers challenge add-backs that are not evidenced, revenue concentration, customer churn, capital expenditure assumed in the forecast, the normalised working capital peg, and anything debt-like that has been left outside net debt — deferred consideration, unfunded leave liability, pension shortfalls, factored receivables.
When is an independent valuation necessary?
When a number will be relied on by someone other than its author: a fundraising round, a sale process, a shareholder exit or buy-out, an ESOP grant, purchase price allocation after an acquisition, a dispute, or a board decision that must be minuted with support.
Where To Go Next
Complimentary indicative valuation
A written range with methodology and key drivers, returned within two business days. One per company, no obligation.
Commission a full valuation
Reconciled financials, normalised earnings, a built DCF and comparables set, and a report a counterparty can review.
How an engagement runs
An anonymised walkthrough of a sell-side mandate — scoping, normalisation, triangulation and what buyers test.
Related reading: the business valuation guide, the WACC calculator behind the discount rate, and the equity bridge calculator for the move from enterprise to equity value.
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