However, these results obtained in just a few clicks must be approached with caution. Specialists unanimously agree: valuation is a complex and delicate exercise. Balance sheet ratios must indeed be adjusted to reflect the unique specifics of the business. These adjustments—or normalizations—can significantly impact the ultimate company valuation. Here are some key questions to consider:

  • Regarding profitability: Is executive compensation aligned with market rates? Should discretionary expenses—perks not strictly required for ongoing operations—be adjusted? How will rent evolve post-transaction? Should we anticipate changes to the cost structure or commercial margins? What non-recurring items need to be restated?

  • Regarding the balance sheet: Does the book value of inventory reflect market reality? Is work-in-progress accurately valued? Are capitalized development costs (such as capitalized R&D) material, and do they generate actual cash flow? Is the accounts receivable portfolio healthy? Are there doubtful accounts insufficiently provisioned? How is financial debt evolving, and should we forecast an increase or decrease in bank debt?

  • Regarding available cash: Are there non-operating assets that can be valued separately? What is the working capital requirement, and how is it trending? Should seasonality be factored into liquidity needs?

Valuation is the starting point of any ownership transition. While it is tempting to seek an easy shortcut, an automated calculation—even one combining multiple valuation models—cannot account for these critical nuances. Operating on flawed or superficial assumptions risks derailing the entire sale process.

Moreover, given that financial subsidies (*) exist for professional advisory services, it would be a shame to rush through this step.

Only a tailored, human-led approach can uncover the unique characteristics of a business. Considering the significant financial and human stakes involved, this exercise must be conducted with utmost rigor. Furthermore, it is essential that the M&A advisor guiding the deal has fully mastered these key valuation drivers (). When the asking price is solidly grounded, it establishes the atmosphere of trust required for successful negotiations.

(*) In Wallonia, up to 75% of advisory fees can be subsidized through Chèques Entreprises when the valuation is performed by an accredited partner. More information at www.cheques-entreprises.be.

(**) Curiously, some "advisors" attempt to manage transactions without having conducted or thoroughly analyzed the valuation. How can one maintain credibility without a full command of the numbers?