The valuation core
The arithmetic that turns your answers into a value, and the rules a value has to pass before it prints.
What it computes
Every MonoBridge value is built the same way, in the same order. Your answers go in at the top; a value for your share of the business comes out at the bottom.
- NormalizeEarnings restated to what the next owner would earn: owner pay at market, one-time costs added back.
- ForecastTen years of cash, year by year, from your customers, prices and costs.
- DiscountEach year’s cash brought back to today at a rate built from published pieces.
- WeighThe forecast rerun in several states of the world, each with stated odds.
- BridgeFrom the whole business to the owner’s share: cash in, debt out.
- CheckThe answer held against what similar companies sold for, and against the floor.
You don’t need to follow the arithmetic to use the answer. What matters is that every step is written down, and the same inputs always give the same value.
The income approach is the anchor. For a phone company that owns its platform, that means an unlevered discounted cash flow on a customer-cohort forecast: today’s customers thin out by churn each year, and each year’s new customers arrive as their own band. The forecast runs for the half-life of the customer book at the reported churn, held between five and ten years. For the sample that is ten years.
One value, built from four states of the world
The future isn’t one forecast. The core reruns the whole valuation in each of several states, each with written odds, and the headline is the weighted average. Nothing about a bad state is hidden in a fudge factor: it has its own row.
How to read it. Each bar is the value if that world comes true. Multiply each by its weight and add them up: the result, $3.93M, is the headline.
The odds aren’t pulled from the air. The mid-case takes what the named states leave. Re-pricing by bundled competitors gets 29% because it is the pressure every provider of this kind faces. The regulatory gate starts at 3% for a provider whose listing is current, and it rises if the listing is deficient or unknown.
A fifth state, an upside from attaching contact-center and AI products, is shown in the report but kept out of the headline until the industry research carries evidence of attach rates for businesses this size.
V = Σs ps · Vs
0.51 × $4.31M + 0.29 × $3.48M + 0.17 × $4.12M + 0.03 × $0.77M ≈ $3.93M
From the whole business to the owner’s share
A buyer pays for the business; the owner gets what’s left after its debts. The core starts from the value of the operations and walks to the value of the equity, one line at a time, and shows every line even when it is zero, so everyone can see it was looked for.
- SEnterprise value$4.29M
- 1Excess cash+$121k
- 2Debt and finance leases−$100k
- 3Debt-like items$0
- 4Unpaid regulatory fees$0
- EEquity value$4.31M
How to read it. Start with what the operations are worth. Green adds, red subtracts, grey is a line that was checked and came to zero.
The other lenses are checks, not votes
The cash-flow value is the only lens built from this business’s own numbers, so it sets the headline. The market lenses ask what similar companies sold for. They sit beside it on one chart so you can see where the methods agree.
- Its future cash, in today’s dollarsDiscounted cash flow$3.48M$4.31M
- Similar companies, per dollar of salesRevenue multiple$2.80M$4.00M
- Similar companies, per dollar of profitEBITDA multiple$2.21M$3.60M
- Similar companies, per customerPer-customer multiple$1.77M$4.04M
- Selling only the customer listFloor value$1.07M$2.00M
Value today: $3.93M
How to read it. Each bar is one method’s range. The dashed line is the concluded value. The floor is what the customer list alone would fetch in an orderly sale to another provider.
In the method, a market approach can carry weight up to, but never above, the income approach, and its weight is set by how good its evidence is. In this industry the disclosed deals are few and far larger than a $2.65M business, so the engine shows the multiples as a cross-check and concludes on the cash flows. A reader who doesn’t credit the forecast can read the market lenses as the answer; the report says so in those words.
- Rate. The unlevered cost of capital, 15.4% for the sample, built from the 10-year Treasury, beta times the equity risk premium, a size premium and written company-specific tests
- Horizon. The half-life of the customer book at the reported churn, held between 5 and 10 years: 15 years at 4.7% churn, held to 10
- Terminal value. 60% perpetuity on normalized free cash flow at 1.5% growth and 40% exit at the median precedent EBITDA multiple; 37% of enterprise value for the sample
- Tax. 26% on operating profit
- States. Mid-case, bundle compression, contribution escalation and the regulatory gate, weighted 51 / 29 / 17 / 3 for the sample; the upside state sits outside the headline
Rules a value has to pass
The core is written as a short list of rules. These are the ones that matter most to an owner:
Risk lives in one place
A risk is priced either in the discount rate or as a state of the world, never both. Counting it twice would quietly cut the value twice.
Growth needs evidence
A forecast above the industry’s base rate has to carry named evidence or it is cut back. The upside state stays out of the headline for exactly this reason.
Adjustments need a document
Owner pay reset to market and one-time costs added back are credited only when a document backs them. An add-back with no document is listed, and not credited.
The bridge is applied once
Cash, debt and debt-like items move the value once, on the way from the business to the owner’s share, and nowhere else.
The answer is stated for one stake
Whole business or a minority stake is fixed before any number is computed. A value that doesn’t say which stake it describes hasn’t concluded.
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