Business Scoring and Valuation Matrix

This scoring and valuation model will help investors or entrepreneurs to score businesses based on nature of business, competitive intensity, competitive positioning, company type, competitive advantage, dependencies, management quality, earnings quality, and off-balance sheet exposure

Business Scoring and Valuation Matrix
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This best practice model is simple and customizable and produces results that are easy to understand. The scoring model provides insight into the overall value by allowing you to score a company or a project over 80 attributes broken down into 9 categories.

Every attribute is assessed and given a simple score of Yes/No that you can personalize. Once you have decided on all your attributes, you can select different weights you believe each attribute should have in the total score. For instance, if you think that “Is the industry new with very high growth prospects?” should have twice as much importance as “Are there high fixed costs or are there high working capital needs?”, then you can choose a weight of 2 and 1 respectively for each attribute.

The model will then automatically generate a score showing the impact of each attribute on the overall grade. To make it more visual and clear, the model shows the score on a bar chart which allows to clearly see the negative impact of the attributes with disadvantageous values.

The model also includes a spider web or radar chart to be used for performance analysis and showing the strengths and weaknesses of the target by category.

If you are looking for a good way to rationalize your thoughts on a company or a project and want to combine the different pieces of information you have and turn them into a grading system.

Methodology
There are a total of 79 attributes broken down into 9 categories which you can answer with a simple “Yes” or “No” in Column D. Answers which negatively affect the model will turn RED and if affected positively will remain green.

Weight is assigned to each attribute in Column E which is 1 on default. You can change weight to any POSITIVE number you wish to if you believe any attribute is more important than others. If you don’t want to consider any attribute, put “0” in weight and the model will not consider it.

The final rating will be calculated on the “Score” sheet with a bar chart and web chart. The bar chart will show you a mix of green and red, green being the positive share in the rating. The web chart will show you a relative score of all 9 categories.

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