Through a partnership with CoreValue Software, MRC gives businesses the data and tools needed to build sustainable, transferable enterprise value. Founded in Lebanon, New Hampshire in 2012, CoreValue Software works with many Manufacturing Extension Partnership centers throughout the country to provide business valuation and improvement evaluations.
After gathering information about your industry, annual revenue, profit, etc., we ask a series of questions around 18 Value Drivers in order to compare your current status to best practices. Subsequent CoreValue levels ask more detailed questions; in all, we offer a 239-point assessment.
Using the resulting scores and ratings, MRC plots your company’s enterprise value against an industry norm to determine the value gap. This identifies your strength (or vulnerability) and how much value is being left on the table due to operational and market deficiencies. The resulting reports focus on business areas in need of attention and suggest tasks to build performance and value.
What is Enterprise Value?
Enterprise value (EV) measures the true worth of a business. More comprehensive than the market capitalization, EV is often referred to as the “takeover value”—the amount of money required to buy a company at current market price, inclusive of cash, debt, and other items.
EV also measures your ability to dependably generate revenue and profit at or above its current rate even without the current business owner(s) in charge. To determine EV, investors and buyers look “under the hood” to analyze the operations (typically as part of a due diligence process).
Operational Valuation vs. Financial Valuation
There are two fundamental ways to value a business: operational valuation and financial valuation. The difference is purpose.
The purpose of a financial valuation is to provide a single number, which will vary depending on how the number is to be used (e.g. for tax purposes, financing, divorce or partner buy-outs). Financial valuations do a good job for a single purpose, but they are static, not actionable.
The purpose of an operational valuation is to answer “why” a business has value. It measures operational strengths and weaknesses, as well as the ability to generate future revenue and profit.
CoreValue, on the other hand, determines Enterprise Value—what the business is worth, what it could be worth, and where there are weaknesses creating the gap between the two. We provide both dynamic and actionable information, both of which are critical to the buyer, because they provides the operational transparency needed to execute a good deal.