A business is worth the cash it will produce in the future, discounted to today. Professionals estimate that three ways - DCF, comparable companies, comparable transactions - and trust the answer only where the three overlap.
Discounted Cash Flow answers one question: how much cash will this business generate, and what is that stream worth today? Three ingredients decide everything.
The forecast. Five years of free cash - what is left after costs, tax, and the reinvestment needed to keep going. Not revenue. Revenue is vanity here.
The discount rate. A dollar promised next year by a small business in a frontier market is worth much less than a dollar today. Country risk, currency risk and small-company risk stack up, so discount rates in Laos run high - and value runs correspondingly lower than owners hope.
Terminal value. What the business is worth beyond year five. It is usually the biggest number in the model and the easiest to abuse. If 90% of a valuation sits in terminal value, ask hard questions.
Each method fails differently. DCF fails when forecasts are fantasy. Comparables fail when the "comparable" is not comparable. Transactions fail when the data is stale. A serious valuation runs all three and shows you where they agree.
Illustrative numbers. The value lives where the three lenses overlap - here, roughly $780-900k, not one magic figure.
The full financial model in Excel - every assumption visible and editable, no black box. A valuation report in PowerPoint - the story, the methods, the range, ready for an investor, a partner, or a buyer. And a walkthrough call so you can defend the number without us in the room. Fixed fee after a free scoping call. Never hourly.
There is no reliable public multiple; deals are private. Valuations here lean on DCF with high discount rates, sense-checked against regional multiples with heavy discounts.
That is book value - usually the floor, not the answer. A profitable business is worth its future cash, which normally exceeds its net assets.
Partners, equity splits, financing, disputes, or the reinvest-or-exit decision. The number changes the decision.
Written by the Vientia finance team. Corporate strategy and M&A background across multiple industries.
Full Excel model + PPT report. Free scoping call, then a fixed quote.
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