Training
Using BankerValuation.com is easy! We have developed the program to be user friendly and self-explanatory. To get you started, however, we have developed step-by-step instructions for using the program. CLICK HERE to view and print a copy of the instructions.
In addition to the manual, we offer a no-cost training session to anyone in need of further instruction. The training takes place in a 15 to 20 minute phone call. During the session, we will walk you through creating a valuation with BankerValution.com and we will answer any questions you might have. If you are interested in a training session please contact Lori Mize.
Finally, we are always available to answer your questions, whether you are familiar with the program or you are using it for the first time. Our contact information is listed on the Contact Us page.
Frequently Asked Questions
1. What do I do if I have lost my password?
Click on the “Forgot Your Login?” link located on the homepage of bankervaluaiton.com, enter your email address and your password will be emailed to you.
2. Can I change my password?
Yes, you can. You may do so my clicking on the “My Account” tab located on the left side of the page in your workspace.
3. What do I do if I don’t have time to finish a valuation I am working on?
There is a “Save My Work” button located on the bottom of each page. Simply click the button and your work will be saved.
4. I’ve entered all the necessary information into the Cash Flow page and the final report is not summarizing the valuation.
At the bottom of the Cash Flow pages there is a “Calculate” button. You must click this button to first calculate the “weighted” revenue and cash flow. Then, you will click “finish and save” and name the file. The final calculated value will be shown in the PDF report.
5. What if I don’t see the proper SIC code?
If you don’t find the exact SIC code, you will find the closest “range” or where the SIC falls in between. For instance, instead of SIC 1711, you will click 1700-1799 (Special Trade Contractors).
6. Does the program take into consideration real estate?
BankerValuation.com was developed to estimate the value of a business only – not including real estate. The user must treat the business as if it is separate from real estate and paying normal market rent.
7. What assets should be entered into the “Asset Section”?
Only the assets that are included in the sale should be included. For example, if it is a traditional “asset sale” where only furniture, fixtures, equipment, inventory and goodwill are included, you would only enter in these assets (not including goodwill). Goodwill (or other intangible assets) is not included in this section because it is intangible and will be calculated later.
8. In the risk section, do my answers need to be exact?
The answers in the risk section will help you develop the cap rate based on the company’s specific risk. Some questions are more subjective than others; however, you should answer them as accurately as possible.
9. Do I have to enter in a projection on the cash flow page?
Yes. The projection is the basis for the discounted cash flow method. You do not have to weight the projection; however, if you enter in $0 or leave it blank, the discounted cash flow method will calculate to $0.
10. How should I create a projection?
We suggest the following:
a. Using the borrower’s projection (if reasonable);
b. Using an average or weighted average of the last few years;
c. Annualizing the interim or year to date figures;
d. Using a conservative growth rate over the last full year.
11. Does the program annualize the numbers for me?
No it does not. You must manually annualize the figures and “click” annualized and 12 months.
12. The cash flow page gives many add-backs to pick from. Do I have to use all of them?
We provide spaces for the most commonly used add-backs, but you do not have to use them. For instance, if a single buyer is acquiring the business from a working seller, you would add back the seller’s salary only. You would not add back the “manager’s salary” unless the buyer will replace both.
13. Should I add back all of depreciation?
We suggest adding back all of depreciation and deducting an amount that would cover necessary capital expenditures (Normal Depreciation/Cap Ex). If no capital expenditures are needed going forward, you could add back depreciation with no replacement for capital expenditures.
14. How do I treat rent expense?
If the property is leased and at market rate, there would be no add back or deduction for rent. If property is owned by the seller, you should add back any historical rent and deduct fair market rent as if the real estate is being leased from a 3rd party at market rates. This separates business value from real estate value.
15. How do I know what replacement salary to use for the buyer?
We suggest deducting an economic market replacement salary. This salary would be what the owner of the business could hire a competent manager or president. If the buyer already works for the business, you would add back the buyer’s historical salary under “manager” and deduct either the same salary or a market salary under “replacement”.
16. How should I weight the financial performance (under weighting)?
The last step is to weight the historical and projected performance. The goal here is to weight the years that would best describe what is most likely going to happen for the next 12 months and beyond. If there is an apparent trend (increasing or decreasing), you would give most weight (sometimes all – 100%) to the most recent year(s). If there is inconsistent performance, you could evenly weight all periods.