Acme America Technologieslegacy.bizequity.com/pdf/sampleReport.pdf · The estimates and data contained herein are made using the information you provide, publicly available information

Business Valuation Report

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided herein is provided for your internal use only and may not be copied or redistributed for any reason.

Acme America Technologies111 Chester AvenueSan Francisco, CA 94110

Acme America Technologies

October 2, 2011

Contents

Purpose & Conditions

Assumptions & Approach

Company Description

BizEquity Valuations

Financial Snapshot

Financial Summary

Financial Analysis

Ratio Analysis

Next Steps

2

3

4

5

6

7

8

11

15

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Purpose & ConditionsThis report was generated to show the estimated fair market value and estimated liquidation value of the profiled business. The standard of value applied in this case is two-fold. First, the report uses a combination of market and income approaches to estimate the Fair Market Value of the business assuming that it would operate as an ongoing enterprise. Second, the Fair Market Value of Assets and Liabilities was determined to estimate the Liquidation Value the business. For more information on the approaches, please see the 'Assumptions & Approach' section in this report. For this purpose, Fair Market Value is defined as:

“...the price that an interested but not desperate buyer would be willing to pay and an interested but not desperate seller would be willing to accept on the open market ...'” The opinion of value given in this report is based on information provided by the user and other sources. This information you input is assumed to be accurate and complete. However, BizEquity has not audited or attempted to confirm this information for accuracy or completeness.

It's important to note that the above valuations are not final numbers. Instead, we are looking at general estimates. As a result, the overall valuation should be a frame of reference, not an o!cial appraisal. This report should not be used to obtain credit or for any other commercial purposes. The information provided herein is provided for your internal use only and may not be copied or redistributed for any reason. This information is provided 'as is' and without warranty of any kind. BizEquity does not represent or endorse the accuracy or reliability of the information herein and you acknowledge that any reliance upon this information is at your sole risk. By performing this estimation and generating this report, neither BizEquity, nor any of its a!liates, o!cers, directors, employees, agents, or contractors, is to be required to give expert testimony or to be in attendance in court, in any other legal proceeding, or at any government hearing with reference to the matters contained herein.


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Assumptions & ApproachWhile this valuation was generated considering as many company-, industry-, and location-specific details as available, the value presented in this report is an automated estimation of the Fair Market Value of the business and the business's assets and liabilities. Some events and circumstances that might impact the overall valuation of a specific business can not be taken into account for the purpose of this report. Valuation Approach BizEquity provides you with two di!erent valuations for your business:

Fair Market Value of Your Company (Business Value) Assuming that it would operate as an ongoing enterprise.1

Fair Market Value of the Assets and Liabilities (Liquidation Value)Owned by the company assuming that the company would get liquidated 2

Essentially, our focus is to try to provide the best approach for small businesses. So, we include a meld of the following:

Market Approach: This involves analyzing the recent Sales of comparable businesses. In a way, this is similar to how residential real estate is valued.

Income Approach: With this, you forecast future Income and then find the present value of these streams.

Rules-of-Thumb: These are simple valuation methods that are often used by financial advisors.

Based on all this, we have the following three valuations for your firm: Optimistic: If you think that this specific business will outperform the local industry.

Expected: This is the most likely value of your business.

Pessimistic: Applicable if you think that this business will face unexpected di"culties.

The Liquidation Value of the business presented in this report assumes that the company will no longer continue to operate. In this case, it's required to wind down and liquidate the company. The Liquidation Value is based on the information you provided on the market values of your company's Fixed Assets and Total Debt.

However, when a company closes down, it can be di"cult to get good values when selling Assets. The Liquidation Value in this report attempts to takes this into account.


Company Description

Business Location:

Business Industry:

Operational Period:

Operations Assessment:


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Vulnerable to departure of owner.Customer Concentration is high with 3 customersaccounting for $15,000,000 of Revenues or 100% of sales.

Technology

111 Chester AvenueSan Francisco, CA 94110

10/02/2011


19 years

BizEquity Valuations

Based on your inputs, we have computed the following estimated valuations:

Optimistic Business Value: The Optimistic Business Value is the most likely estimated value of this business if you believe it will outperform the local industry.

Pessimistic Business Value: The Pessimistic Business Value is the most likely estimated value of this business if it were to face unexpected di!culties.

Liquidation Business Value: The Liquidation Value is based on the information you provided on the market values of your business's Fixed Assets and Total Debt.

Expected Business Valuation:The Expected Business Value is the most likely estimated value of this business.



$13,773,488

$25,579,335

$19,676,412

$4,325,000

10/02/2011

Financial Snapshot

Estimated fair market value for

Estimated 2010 Cash Flow

Return on Equity (ROE) Customer Concentration

Pretax Income Cash-Flow-to-Revenue Ratio Debt-to-Equity Ratio



$19,676,412

In conclusion, the overall assessment of Acme America Technologies isthat its financial position is in accordance with its industry peers.

$2,000,000

Better than Industry Avg

Better than Industry Avg

0%


HIGH

Below Industry Avg: 20.00%

10/02/2011

Customer Concentration is high with 3 customers accounting for $15,000,000 of Revenues or 100% of sales.

Financial Summary

To understand and interpret your valuation, it's usually very helpful to know the financial background of a business. Here is the data that you provided for this valuation:

Income

Revenue

Pretax Income

Interest Expense

Owner Salary

Owner Benefits/Perks

2010 2009 2008

Assets

Cash

Account Receivables

Inventory

Fixed Assets

General Depreciation

Total Debt

2010 2009 2008



$1,000,000

$200,000$200,000 $200,000

$100,000 $100,000$100,000

$100,000$100,000 $100,000

$700,000$800,000

$500,000$500,000$500,000

$1,000,000 $1,000,000 $1,000,000

$300,000$400,000 $100,000

$15,000,000 $10,000,000$13,000,000

$700,000 $700,000$700,000

$5,000,000 $5,000,000$5,000,000

$400,000 $100,000$800,000

10/02/2011

Financial Analysis

To better understand your company's operations, we have a variety of useful charts below. In terms of valuation, the key factors include Sales and Cash Flow growth. Also, a valuation may be negatively impacted if there is a significant growth in Debt as well as Receivables and Inventory (higher than the growth rate in Sales and Cash Flows). The chart below shows you important financial metrics in comparison to Revenues to get a sense of the trends.

Under-Performing Average Out-Performing

Cash Flow/Revenue

Cash/Revenue

Receivables (Conversion)

Inventory/Revenue

Fixed Assets/Revenue

Total Debt/Revenue



X

X

X

X

X

X

10/02/2011

Financial Analysis continued

This chart shows you Pretax Income in comparison to Revenues to some key financial items.

Under-Performing Average Out-Performing

Receivables/Pretax Income

Inventory/Pretax Income

Fixed Assets/Pretax Income

Total Debt/Pretax Income



X

X

X

X

10/02/2011

Financial Analysis continued

With this chart, you can get an indication of the growth trends of the important drivers of the valuation of the business.



Ratio Analysis

Ratio analysis is a common approach for businesses to help identify strengths and weaknesses. Essentially, it involves boiling down complex financial statements into meaningful analysis. With the information you inputted in the Business Valuation tool, we were able to compute some key ratios. We also put things into perspective by showing which ratios are better or worse than the average for the industry of the business.

An operational ratio provides a quick look at how a key part of your business is performing compared to your peers.

Under-Performing AverageYear $ Out-Performing

2010

2009

2008

Operational Ratios

Sales/Square Feet

---

---

---

---

---

---

---

---

---

Under-Performing AverageYear Percentage Out-Performing

2010

2009

2008

Interest Coverage

Indicates the e!eciency of how you use your space.

Shows how much cushion a company has in paying its interest expenses.



$300

3%

4%

2%

X

$260

$200

X

10/02/2011

X

Ratio Analysis continued

Under-Performing AverageYear Out-Performing

2010

2009

2008

Inventory Turnover

Under-Performing AverageYear Percentage

Percentage

Out-Performing

2010

2009

2008

Fixed Assets Turnover

How long it takes to sell inventory on hand.

Shows how productive a company’s assets are.


2010

2009

2008

Receivables (Conversion) Increases over time could signal di!culty in collecting from customers.



38%

43%

100%

X

X

X

X

X

X

X

X

X

2%

3%

3%

19%

32%

10/02/2011

100%


Under-Performing AverageYear Out-Performing

2010

2009

2008

ROE

Under-Performing AverageYear Percentage

Percentage

Out-Performing

2010

2009

2008

Debt/Equity

Compares profitability to the equity value of a company. Indication of the strength of the business model.

Shows the extent of the debt load, in comparison to a company's equity value.


2010

2009

2008

Cash/Debt Shows the ability to pay o! existing debts.



X

0%

0%

0%

X

X

X

0%

0%

0%

X

0%

0%

0%

X

X

10/02/2011

X

X


Revenue margins show the percentage of expenses or profits/losses compared to Revenue.

Under-Performing AverageYear Percantage Out-Performing

2010

2009

2008

Revenue Margins

Rent/Revenue

---

---

---

---

---

---

---

---

---


2010

2009

2008

Cash Flow/Revenue

This should remain stable over time.

A rising percentage will often lead to a higher valuation.


2010

2009

2008

Pretax Income/Revenue A rising percentage will often lead to a higher valuation.



X

0%

0%

0%

0%

0%

0%

X

X

X

X

X

0%

0%

0%

10/02/2011

Next Steps

Where are you in your journey?We trust that you have found the BizEquity Valuation Tool to be an informative resource. Our aim is to provide guidance for growing companies as they evolve and take steps to elevate their performance and results.

No matter where you may be today, we can probably help you get closer to your vision:

If you're in the early stages of your company's life, perhaps you need to expand your capabilities and reach via marketing, intellectual property advisory, benefits, and tax consulting.

If your business is established and nearing a turning point, maybe you seek legal representation, strategic partners, and/or growth funding.

If the company is already a substantial success with a critical mass of business, we can help you formulate and/or pursue a smart exit strategy.

If you have more specific questions and feel our experience and network may be of value, please submit your contact information to start a dialogue with our BizEquity Solutions Team.



This Business Valuation Report was provided by

BizEquity exists to help entrepreneurs quantify their success, and then leverage that knowledge to pursue new growth initiatives.

Our Valuation Tool was conceived and constructed by financial analysts and entrepreneurs, in collaboration with accounting professionals, banking and investment analysts, attorneys, technologists, and other specialized advisors.

BizEquity was first developed in 2007 by a leading financial institution to introduce a revolutionary way to value smaller companies in primarily asset-based businesses. In 2010, the BizEquity Valuation Tool was revamped with additional growth company-based analysis and reporting engines, enabling BizEquity to serve the entire small to mid-size business (SMB) market.

Today, the new BizEquity incorporates additional refinements to the proprietary and patent-pending business valuation engine that, using a complex series of algorithms and industry comparable data, can now handle the most dynamic and fastest growing industries and markets. In a matter of minutes—with all necessary data captured by way of a simple, user-friendly web interface—business leaders can gain access to a detailed Report rich with financial metrics, insightful market comparisons, and observations about the company's overall health and potential.

For additional information on BizEquity and how our exclusive Flagship Service™ o!erings can help you think-build-and grow your business, Please contact us at [email protected].

Below is an example of our patent pending on and o!-line Flagship Services we can assist your business with.

Find Capital Find a Buyer

Explore Mergers Meet Partners

Acquire Companies Explore Franchising

Flagship Services™

Where are you in your journey?Let us help you take the next step.

Documents

Acme America Technologieslegacy.bizequity.com/pdf/sampleReport.pdf · The estimates and data contained herein are made using the information you provide, publicly available information