The purpose of this assignment is to develop and demonstrate mastery of business valuation skills. The business valuation report should look similar to an actual report presented in the field by entrepreneurs to potential funders. Relevant connections should be made to course objectives.
Access the Internet and locate a business plan for a business that is similar to one that you are interested in developing.
Write a two-page business valuation report that answers the following questions:
- What is the product? What problem does it solve?
- What is the market?
- How big is the market?
- What are the associated risks (i.e., government risk, market risk, industry risk)?
- What is the discount rate you would apply to this investment?
- What valuation would you give to this business using discounted cash flow method?
Refer to the proforma profit and loss statement in the financials section of the business plan.
Find the EBITDA numbers in the proforma and use the NPV calculation formula using your calculated discount rate to establish a valuation for the enterprise.
Explain and justify your valuation.