Why Am I Seeing Negatives in My Value Section?
You’re seeing negatives in the value section because there’s a discrepancy between the current or past year’s revenue and the desired enterprise value the client has stated—combined with the number of years they want to reach that goal.
In this example, the client wants to reach a $5 million enterprise value by 2027. After 2027, the system calculates negative growth in future years—like in 2030—so that the value resets to hit that $5 million again.
This is intentionally designed to prompt a conversation between the advisor and the client.
The key questions to discuss are:
- Have we undervalued the business, and should the desired enterprise value be increased?
- Or, do we need to shorten the timeline for reaching the desired value?
Once that discussion takes place, you can go in and adjust the growth path accordingly.