Learn everything about business valuations, from methods and strategies to metrics. Whether you’re raising capital, planning an exit, or simply seeking to maximize your business’s value, our resources will guide you.
Debt, if mismanaged, has the potential to become a destabilizing force capable of bringing down even the most powerful corporations. For instance, General Motors (GM), a prestigious American automobile company, had to file for bankruptcy after its debt became unmanageable. The company could only be rescued after its debt was reduced from $170 billion to …
The data highlights a thriving US startup ecosystem driven by advancements in AI, fintech, SaaS, space exploration, and biotech. Venture capital firms play a pivotal role in fueling these unicorns, while strategic partnerships amplify growth potential. For entrepreneurs or investors interested in these sectors, focusing on scalable business models and emerging technologies could yield significant …
Long ago, billion-dollar startups were scarce; they deserved their magical nickname: unicorns. Today, these powerful private companies have multiplied across the global economy, transforming from rare curiosities into formidable herds that reshape entire industries. With more than 1,550 unicorns worldwide in 2025, their distribution tells us a compelling story about where innovation thrives, how capital …
Jawbone, a wearable tech startup, was incorrectly valued at $3 billion as this valuation didn’t account for market realities like competition from tech giants. As a result, the company had to shut down, much to the dismay of investors and employees. Unfortunately, business valuations that do not align with market conditions are a common occurrence. …
Valuation is an important factor in the startup world. Think of Lehman Brothers. A Wall Street giant, its overvaluation was the precursor to their dramatic 2008 collapse. Lehman Brothers had assets of $691bn at its height, but this high valuation masked the fragility of its finances. It was a warning about overpriced valuation. When the …
The PEG ratio is one of the most valuable metrics in an investor’s analytical toolkit, offering deeper insight than traditional valuation measures. While the widely-used Price/Earnings (P/E) ratio helps assess a company’s current valuation relative to its earnings, the PEG ratio takes this analysis a crucial step further by incorporating the critical growth element. This …
Industries have evolved distinct liquidity patterns in the financial ecosystem based on their unique operational demands, cash conversion cycles, and market pressures. A manufacturer stockpiling inventory will present a different financial profile than a subscription-based software company, though both might be equally robust. Whether you’re an investor seeking stability, or a manager gauging liquidity, understanding …
Consider you are a small manufacturer and are faced with leasing a warehouse for an extreme seasonal sale event. Due to short notice, the owner demands a high security deposit and excessive rent. Without proper warehousing, you may lose significant profits. At this juncture, you need to assess whether you can pay the rent and …
When looking at a company’s acid test ratio, it’s important to compare it not only to the general benchmark but also to industry-specific averages and the company’s historical performance for a more comprehensive assessment of its liquidity position. The acid test ratio is widely used across various industries for financial analysis and decision-making. Its application …
As a founder, you must be extremely wary of inaccurate valuations since they can deter investors, set unrealistic growth expectations, and lead to suboptimal decisions in key areas such as mergers and acquisitions (M&As). A great example of this would be Yahoo! passing on Microsoft’s $44.6 billion acquisition offer and then, in 2016, having to …
Last Updated: December 2025 When a company becomes successful, investors may expect two types of yields. One is the yield that demonstrates development potential. This operational and performance-based development can be rewarding for certain types of investors. Similarly, the yields that promise the investors definite and stable income regularly make certain other groups of investors …
Assigning a valuation to early-stage startups is particularly difficult because there is little to no financial history and their products are not market-tested. Instead, these valuations are based on the early-stage startup’s potential, which can be highly speculative. As a result, they may have higher valuation multiples than better-established companies or even other startups for …
Last Updated: December 2025 One financial valuation statistic used to compare the current market value of a company to its book value is the Price to Book Ratio (also known as Market to Book Ratio). The book value is equal to the company’s net assets and is derived from the balance sheet. In other words, …
The root cause of the failure of 65% of start-ups is due to founder conflicts. Issues like executive misconduct, conflicts of interest, and mismanagement of resources are often the roots of shareholder disputes. A common flashpoint within these disputes is a financial reporting dispute, where disagreements arise over the accuracy, transparency, or interpretation of a company’s …
Last Updated: December 2025 Anyone who’s been in the investment market long enough will be aware of the many valuation tools that are used. Each one considers different valuation parameters and has its merits and demerits, but none of them are used on its own. Only the best professional analysts know the right combination to …
Given that some of the most highly valued companies in the US are software companies, this sector is bound to attract investors and breed innovation. Accurate software company valuation has thus become a critical skill for investors, analysts, and business leaders. So, let us help you build an understanding of exactly how software companies are …
Last Updated: December, 2025 Company valuation is one thing that every entrepreneur must bear in mind at every stage of a business. No significant decision can be taken without estimating the market value of a company at any given point. Factors called valuation multiples are important indicators in this process. Investors and company managements alike …
Last Updated: December 2025 As of 2025, the Price-to-Sales (P/S) ratio has demonstrated notable trends that reflect broader market conditions and investor sentiment. The P/S ratio has shown a significant upward trend over the last five years, when it surged from 3.894 (Minimum Range) to 6.925 (Maximum Range) The current P/S ratio for the S&P …
Last Updated: December 2025 Raising capital is an inevitable step in growing your business to its next level. This is because as a company starts scaling, the need for funding also grows because there are employees to be paid and operational activities to be updated. It is also important to understand how to balance these …
A logical step in resolving disputes over business value is getting the unbiased opinion of a valuation analyst. This holds true even when such disputes snowball into lawsuits. However, when this does happen, the role of a valuation analyst becomes a lot more nuanced and is referred to as a valuation expert witness. The goal …
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