Operational performance -- what a company 'does' to generate revenue and profit - is how we look at business.
On the surface, CoreValue is an elegantly simple tool. Underneath, our complex algorithms, vetted by thousands of businesses, advisors and academics over 30 years, give companies the data and tools necessary to build sustainable, transferable Enterprise Value.
After providing information about the company including industry, annual revenue and profit, we ask a series of questions about 18 Value Drivers so we may compare the company’s status relative to best practices. Each level of CoreValue asks more detailed questions about the drivers. In all, we offer a 239‐point assessment.
Scores are applied and ratings are calculated, based on the answers provided to the survey questions. We then plot the company’s Enterprise Value and compare it against an industry norm to create a value gap. This identifies a company's strengths, risks, and vulnerable areas, and how much value is being left on the table due to operational and market deficiencies.
Our algorithms measure the risk to future revenues presented by the company's current operational processes and procedures, and calculate Enterprise Value for the company based on that risk. CoreValue then calculates the increase in Enterprise Value that can be realized if operational performance is improved, by lowering risk. Red Flags identify those risks which may prevent the monetization of some, or all, of the company’s Enterprise Value, and tasks are suggested to further strengthen performance and value, and reduce risk.
Talking Points: The algorithms are based on research at the Massachusetts Institute of Technology (MIT) and proven in the market over 30 years. The research includes development of a set of private business standards (think GAAP for Operations) that are recognized as 'best practices' for each of the 18 areas measured.
MIT is the premier engineering university in the US.
CoreValue's patented methodology has been used with over twenty thousand companies to capture and grow $9B+ in Enterprise Value.
The algorithms can be broadly explained as comparing the respondent company's due diligence performance with the due diligence checklists from approx. 5,000 closed transactions.
CoreValue benchmarks the subject company against the real world.
Vetted by hundreds of professionals and organizations, including Morgan Stanley, Mass Mutual, the NACVA and one of the nation’s leading valuation teams, Business Valuation Center, the algorithms have proven accurate and the methodology is accepted as effective.
Our algorithms focus on operational performance, and a company's ability to prove it will produce and increase financial output ‐ revenues, profits - into the future, just as due diligence does.
In contrast, straight valuation algorithms use only financial data (yesterday's performance) to give a number which is largely dependent on it's purpose (e.g., divorce settlement, tax valuation, estate planning).