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Business Valuations Intermediate Online Workshop 2024 Session 1

Recorded 19 February 2024. Earnings based valuations – calculating maintainable earnings & how to arrive at the capitalisation rate

Upskill beyond basic business valuations
Case study approach to the key valuation challenges
Practical & real-world application

Recorded 19 February 2024

So, you’ve got a bit of valuations knowledge and might have completed a few valuations. Were you confident with the outcomes and are you sure your approach covered all of the issues?

The Business Valuations Intermediate Workshop focuses on the typical SME valuation issues. Using a case study approach, we look at a typical earnings based valuation and then pull it apart. From working out the capitalisation rate, the maintainable earnings, identifying surplus assets, differentiating between equity & enterprise value, assessing minority discounts or control premiums, valuing different share classes and considering franking credits and tax losses – no stone is left unturned. And, we provide sample documentation for you to follow.

We also identify common circumstances where other valuation methods should be considered.

Presented by Greg Hayes, author of Practical Guide to Business Valuations for SMEs (Wolters Kluwer), these hands-on sessions will assist you to build your valuation expertise and experience. Best for accountants and advisers with the basics of valuation knowledge who are seeking to upskill.

Total 1.5 CPD Hours

Session 1: Earnings based valuations – calculating maintainable earnings & how to arrive at the capitalisation rate

The majority of SME valuations are likely to be earnings-based valuations. The key to getting these valuations right is arriving at an appropriate maintainable earnings figure and assessing the risk profile of the business to arrive at a supportable capitalisation rate. Using a case study approach, we work through these two areas using a process designed to produce a reliable outcome.

The process to move from net profit to maintainable earnings
How to regularise and normalise earnings
3 methods to arrive at a capitalisation rate
How to test outcomes for reasonableness
Applying benchmarks to arrive at a capitalisation rate
Assessing for the existence of surplus assets

Greg Hayes

Director, Hayes Knight

CCH Australia describe Greg as a “serial entrepreneur.” An apt title for the founder of the Hayes Knight group, Knowledge Shop, and Merit Wealth. He is a practice management specialist, innovator, and published author who mentors and assists firms to grow and develop their potential. An accountant for over 30 years, Greg has built a successful Australasian accounting group from modest beginnings in the outer suburbs of Sydney. A popular presenter, Greg has ‘been there and done that.’ There are no untested theories or marketing hype – just practical, realistic principles that are at the core of top quartile firms across Australia.

Beyond his practice management knowledge, Greg is a business valuation specialist. These two skills sets are a powerful combination when applied to the business of accounting. He regularly values accounting practices and has developed valuation models for the profession that look through to the core of how a successful accounting firm functions and what it should deliver.

Beyond his valuation work, Greg assists clients with both buy side and sell side transactions, from providing specific advice to acting as the client adviser from start to finish of a transaction. His experience is across a diverse range of industries and sectors on transactions ranging from $2m to $80m.