You are reading: Dynamic Revaluation

Craig West

Executive Director

Our Dynamic Revaluation is unique to Capitaliz – it allows advisers to constantly revalue the clients business each and every time something changes on the platform. Each time financials are updated the system revalues. More importantly, each time a non-financial metrics is changed or updated – Capitaliz measures the impact of that change and adjusts the valuation accordingly.

The dashboard show the dynamic revaluation and progress towards the Value potential – constantly closing the value gap and proving the Value Acceleration methodology (and clearly demonstrating the value of ongoing advice).

So for example, with Smith Engineering – the business is valued at $5.31 mil and the value potential is $9.05 mil – the non-financial scorecard shows the business has no corporate governance (board) structure and no independent non-executive director. Thru the process, the adviser sets up corporate governance, introduces monthly board meetings and recruits an experienced non-executive director – these projects are marked complete on the platform (in Step 12) and the dynamic revaluation algorithm calculates the impact on value (in this case $400,000) and this value increase appears on the dashboard showing progress towards the value potential.

Streamlining reporting – Business Insights Report

The Capitaliz Business Insights Report is a lot more than a valuation – it is a comprehensive evaluation of the business – producing detailed Insights into the actions to be taken to accelerate and unlock value. The Insights report covers key areas of business analysis – structure, financial, trends, breakeven, cashflow, free Chas flow, sustainable growth rate, credit risk, benchmarking, profit gap as well as foundation and strategic value scorecards. This detailed analysis allows us to calculate economic, industry and business (company specific) risk, weighted average cost of capital (WACC) and a business valuation based on a normalised weighted average of Net Operating Profit after tax (NOPAT).

More important than all of that analysis is the roadmap that uses the platform (and over 300 data points for each report) to accurately determine the items which will have the greatest impact on business value and prioritise those in the implementation plan.

The value potential predicts future value of the business based on the project roadmap being completed, the financial performance being best in class and the business being attractive to a buyer and being able to identify and highlight its strategic value.

Our Value Potential Index (VPI) – shows an average 30 % gap between current and potential; value in SME’s. In Australia this represents a value gap of over $432 billion.

Using the Capitaliz Business Insights Report to drive real change in business value for SME owners represents a huge opportunity to address this major economic issue.

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