A Crown Street professional practice, a Port Kembla fabrication yard and a Kiama cafe are all valued with the same three methods. What differs is which method a buyer would believe, and the report has to explain that choice.
A Wollongong business is assessed under three approaches. The income approach converts sustainable profit into a present value, the market approach compares the business with prices paid for similar ones, and the asset approach restates what it owns and owes at current values. The certified valuer then states which result carries the conclusion and why.
What is the profit this business can keep earning worth in today's money, after allowing for the chance that the profit falls short?
Read the methodWhat did buyers actually pay when similar businesses were sold, and what multiples do listed companies in the same trade trade on?
Read the methodIf every asset were sold at today's prices and every debt and obligation settled, how much would be left for the owners?
Read the methodThe valuer lays the range from each applied approach side by side and states, in plain terms, which one mirrors how a real buyer would price this business. The rest are named as checks, and any approach that was considered but not used is listed with the reason. A hospitality venue in Kiama or Shellharbour with a run of comparable venue sales behind it leans on the market evidence. A Port Kembla machining and fabrication workshop whose value sits mostly in its machines and its freehold leans on the assets.
The weighing produces a range for enterprise value, meaning the business as a whole before any thought of how it is funded. Equity value comes next: borrowings come off, and surplus cash, assets the business does not need and obligations unrelated to trading are added back or deducted. The result is the value of a controlling, transferable interest. Only when the subject is a minority holding or a stake with no ready buyer does the valuer consider a discount for lack of control or marketability, and the report shows how that discount was sized.
A reviewer reads the reconciliation first. An opposing expert in the District Court at Wollongong or the Supreme Court of New South Wales in Sydney, an ATO officer examining a CGT concession claim and a lender's credit analyst all ask the same question: does the figure follow from the evidence, or was the evidence collected to support a figure already chosen?
The audience and the purpose decide how much of this reasoning is written out. An Indicative valuation is for internal decision-making and is not written for third party reliance. A Summary report sets out the approaches applied and the reasoning behind them, and a Detailed report applies and reconciles all relevant approaches in full.
For internal decision-making. Useful for testing an offer, setting an expectation before a negotiation, or deciding whether to go to market. It is not written for third party reliance.
Sets out the approaches applied, the normalisation adjustments made and the reasoning behind the conclusion. The usual choice for a sale, an ownership change or a finance application.
Applies and reconciles all relevant approaches in full. The level required where a court, the ATO, a lender or another expert will review the opinion.