We are pleased to confirm that Dynamic Revaluation has launched and is live on your Dashboards, providing you with the ability to update your client’s indication of value based on:
Changes to Economic Data;
Changes to Projected Profitability; and
Changes to Non-financial data based on the completion of project steps
Noting there should be no impact to existing functionality, this is an additional suite of features. The below provides an introductory guide to utilising Dynamic Revaluation.
As of November 14, 2023, you will see a new tab, which has automatically joined your clients’ files.
1. Dynamic Advisor (Advisor view)
This tab resides under the client dashboard tab you are familiar with.
This tab is dominated by a large section in the middle of the screen called the Dynamic RevaluationTM graph. There is also a financial update console to the right of the graph.
Note: The graph also automatically appears on the client dashboard of any clients you have given file access to. They do not see the financial update console however, it is for advisors only.
2. Graph controls
The options are color-coded as follows
- the current value estimate from the relevant Business Insights Report (navy),
- the potential value estimate in the relevant Business Insights Report (turquoise).
- the value increase or decrease as a result of a financial update or roadmap update (aqua)
If you want to isolate one or two of the lines on the graph, click on the one you would like to disappear.
Clicking on it a second time means it will reappear.
3. Annual revaluations
Dynamic RevaluationTM means each time a step progresses toward completion on the Roadmap, CapitalizTM will add an additional dot along the current valuation estimate line.
4. Interim (or Dynamic) revaluations
If that dot is navy, it means it was due to a formal revaluation in the form of an annual Business Insights Report.
If that dot is in aqua, it means was due to either a financial update or a roadmap update or both.
5. Completing a Financial Update
As you are progressing, it is important to maintain a dialogue with the client about their profitability, because that is a critical ingredient in estimating a business’ value.
If you select the “Update Value” button a new window will appear.
For clarity, to view the definition of Net Operating Profit, hover over the question mark icon in the lower right corner of the financial update console.
You can type in your estimate of Net Operating Profit After Tax for the Financial Year.
Note: This is the normalized NOPAT.
You should also type in some detailed rationale for your figure. CapitalizTM will record this and you can recall it later.
Note: Please ensure when you are updating profitability, you are quite sure. There is currently no means to recall a financial update once submitted. This can only be done monthly.
6. Reviewing Financial Updates
This section of the financial update console contains lines denoting prior financial updates.
Where a note accompanying the financial update has been submitted, it can be recalled at later times by hovering over the question mark icon in that particular line.
Still on the Dynamic RevaluationTM tab, scroll down to the last two sections.
Note: Clients you have invited to the file do not see these two section on their dashboard, it is for advisors only.
1. Industry Specific Variables
Here is some key information automatically brought through from IBISWorld based on the industry code selected.
2. Step status
Roadmap updates are the other way (other than an annual Business Insights Report or a financial update) to initiate Dynamic RevaluationTM.
An advisor must initiate this roadmap update sequence on the roadmap itself.
However, once the roadmap update sequence has been begun, there is a handy link marked “Update Step” which you directly through to the Step Completion Checklist associated with that particular step on the roadmap.
1. The Roadmap Update Sequence
To make a Dynamic RevaluationTM roadmap update go to Projects > select the Task view > Open the relevant Stage and select the relevant Step.
This will give you the option to navigate to the Step Completion Checklist by expanding a dropdown which contains information about the Step Completion Checklist.
2. Accessing the Step Completion Checklist
From here, simply select the text that reads “Step Outcomes | [Step Name]”
- You will see there is also a “Potential” value uplift estimate to the left of the link to the Step Completion Checklist.
- These calculations are current at the time of the most recently completed Business Insights Report, they will not automatically re-calculate in the interim.
- If you have given a client access to a file, they will be able to see this also.
- If you add non-standard Projects to the Roadmap, these will not contain Step Completion Checklists.
This will take you to a window which looks like the below.
1. Step Completion Checklists
Each of the 21 Steps in the Roadmap now contains a Step Completion Checklist, which is accessible when the tasks status is updated to either “in-progress or complete”.
Each Step Completion Checklist comprises dropdown questions and text fields designed to help you know when your client has moved to a satisfactory degree of completion.
Submitting the checklist also initiates a roadmap update on the Dynamic RevaluationTM Chart as well.
Note: best practice is to review each Step Completion Checklist each month that your client works on that particular Step.
2. Step Completion Score
Based on how you answer these questions the score will move from 0% to 100%.
3. Save Draft
In the example that a client has partly progressed toward completion of the Step their score will be higher than 0% but less than 100%.
If at that point in time you believe you have more work to do with the client on the corresponding Step and you believe it likely this will eventually be 100%, then best practice is to save your responses as a draft.
This is because pressing Submit Questionnaire will result in a new dot joining the Dynamic RevaluationTM Graph on the Dynamic RevaluationTM tab. This will prevent crowding.
However, if you believe no more work on the particular Step to be forthcoming, you should go ahead and press Submit Checklist.
4. Submit Questionnaire
If the client’s Step Completion Checklist Score has improved from 0% and you press this button, Capitaliz will automatically quantify the Value Uplift gained and apply it to the Dynamic RevaluationTM graph on the Dynamic RevaluationTM tab taking into account:
- The score (partial completion is possible)
- Any financial updates that have taken place since the most recently completed Business Insights Reports, including:
- those applied at the Financial Update Console
- but also economic changes, such as interest rates or taxation rates
This means it may not be exactly the same number as the value uplift prediction displayed at the Roadmap Update Sequence. This will manifest as a new aqua dot on the Dynamic RevaluationTM graph.
Note: it is important to remember that this value uplift is an interim, estimate only. It is still important to periodically conduct Business Insights Reports to firm this up. They will appear as navy dots on the Dynamic RevaluationTM graph as the case may be.