Module 5, Valuation
Capital Toolkit Valuation produces defensible valuation reports for the moments that need one: selling your business, planning your estate, settling a buyout, freezing for tax, going to court. Three industry-standard methodologies. CPA- and CBV-signed. Built on your real financial data, not a rule-of-thumb multiple.
Someone tells you your business is worth three times revenue. Or six times EBITDA. Or one times book value. These rules of thumb live in the back of every business broker's head and they're fine as a starting heuristic. They're not fine when a number actually has to hold up.
The CRA assessor reviewing your estate freeze doesn't accept a multiple. The opposing lawyer in a shareholder dispute won't. The buyer's diligence team will dismantle it. The judge dividing marital property needs to see methodology, not a thumbnail.
A real valuation isolates the parts of your business that drive value: sustainable earnings, growth rate, working capital intensity, customer concentration, owner dependence, capital structure. It weights three industry-standard methodologies appropriate to your situation. It documents every assumption. The output survives scrutiny because the work is shown.
Capital Toolkit Valuation gives you the same methodology a major-city CBV firm would apply, on the platform your CPA already uses for your books and your FP&A. One pipeline from ledger to signed report.
Three methodologies
Industry-standard practice triangulates value across three independent approaches. The analyst weights them based on the business and the situation: operating businesses lean income, asset-heavy businesses lean asset, transaction-active sectors lean market.
Method 1 · Income
Five- to ten-year projection of free cash flow, discounted back at a risk-adjusted rate. Built directly off the FP&A three-driver model so the projection isn't pulled from the air. Sensitivity analysis on the discount rate and the terminal value.
Method 2 · Market
Public-company comparables (where they exist for the industry) and precedent private-company transactions. Each comp is documented: what was sold, when, for how much, and how comparable it actually is. Adjustments applied for size, liquidity, and control.
Method 3 · Asset
Net book value adjusted to fair market value at every line. Real estate revalued. Inventory written to NRV. Intangibles separately valued. The floor under any operating business and the primary method for asset-heavy holdcos.
The final conclusion is a weighted blend of the three approaches with the weighting and rationale documented in the written report. Every assumption is footnoted; every comp is sourced.
When you need one
Knowing your defensible asking price before you start the conversation. Knowing which value drivers a buyer will most easily challenge. Spending the year before the sale fixing those things.
Setting fair-market value for a freeze, a transfer to the next generation, or a buy-sell agreement triggered by a partner's exit. CRA will eventually look at the number; the documentation has to hold.
Selling shares to employees, buying out a departing partner, or admitting a new investor at a fair price. The valuation anchors the deal economics for everyone.
Divorce, shareholder disputes, oppression remedies, marital property division. A CBV-signed report is normally required; the platform supports that signoff.
Section 85 rollovers, estate freezes, butterfly transactions, family-trust planning. CRA expects a defensible fair-market-value determination at the transaction date.
Annual board-level “what's the business worth” for executive compensation, share-option strikes, or strategic review. Less formal than the above; same underlying methodology.
How it works
Engagement length: two to six weeks depending on complexity. Cleaner books + longer FP&A history = faster engagement.
Purpose (sale prep / estate / court / tax), valuation date, standard of value (fair market vs investment vs liquidation), and the level of signoff required (CPA vs CBV). All captured in the engagement letter.
Analyst pulls the historical financials and normalizes: owner's excess compensation, related-party rent, one-time items, non-operating assets. The platform shows every adjustment with rationale.
DCF off the FP&A projection. Comparables and precedents from the analyst's research. Adjusted net assets from the normalized balance sheet. Each method produces a value range; sensitivity analysis shows the breakpoints.
CPA (and where applicable, CBV) signs the written report. PDF deliverable with full bibliography, sensitivity tables, and methodology narrative. Ready for the lender, the lawyer, the CRA, the court, or the buyer.
What's inside
Purpose, valuation date, standard of value, scope, deliverable. Signed by both parties before work begins.
Every historical adjustment with rationale. Owner's compensation, related-party items, one-time events, non-operating assets separately valued.
Five- to ten-year free cash flow projection off the FP&A driver model. Risk-adjusted discount rate. Sensitivity tables.
Public-company comps where they exist. Private-transaction precedents with size, date, and comparability documented. Adjustments shown.
Balance sheet revalued to FMV line by line. Real estate, equipment, inventory, intangibles. Floor value under operating businesses.
Three methodologies, weighted with rationale documented. Final value range and point estimate. Discount for lack of marketability where applicable.
Narrative explaining methodology, key assumptions, the value drivers, the risks, and the conclusion. Print-ready PDF.
Professional signature on the cover page. Where required, CBV designation for court-defensible work. Survives challenge because the work is shown.
Every assumption, every comp selected, every adjustment captured in the platform. Reproducible years later if a regulator or court comes back.
Who it's for
You're planning a sale, settling an estate, freezing for tax, going through a divorce, or buying out a partner. The number matters and the methodology has to hold up. The platform produces a defensible report for any of those triggers.
Run your valuation practice on the same platform that holds the client's books and FP&A. The analyst's per-engagement time drops 30-50% on average, the historical normalization, comparables documentation, and report assembly are all platform-assisted.
When you need a CBV-signed valuation for a court matter, an estate plan, or a transaction, refer the client here. The deliverable arrives in your inbox with full work product, sensitivity tables, and bibliography.
Honest status
Valuation today is delivered as a CPA- or CBV-led engagement on the platform. The analyst uses the platform's normalization workbook, the FP&A driver model, and a structured report template, but the comparables research and the written narrative remain the analyst's craft. Automation of those steps is on the roadmap.
Note on signoff: Court- and CRA-driven engagements may require Chartered Business Valuator (CBV) signoff, which is a specific Canadian designation. Capital Toolkit supports both CPA-led and CBV-led engagements; book a demo if you need to discuss which fits your situation.
What sits around a valuation
A defensible number depends on the inputs that flow into it, and the use case that flows out of it. The modules below either feed the valuation (clean books, certified financials, a credible projection) or run alongside it (sale prep, equity raise, MBO stack). Engagements often run two or three together.
Normalized historicals feed every method on the report. A clean ledger collapses the time from kickoff to draft from weeks to days.
See module →Compilation, review, or audit-grade financials — the basis on which the valuation report is built. Counterparties expect the working paper trail to match.
See module →The DCF method runs on the FP&A projection model. The same driver assumptions document the upside and downside sensitivity ranges in the report.
See module →The most common valuation trigger is a sale, an MBO, or a tuck-in acquisition. Buy-side and sell-side support runs on the same valuation model.
See module →Mezzanine debt, private credit, and strategic equity raises all reference a current valuation. Same number, same documentation, packaged for the provider.
See module →Institutional priced rounds and PE buyouts need a defensible enterprise value before the term sheet. The valuation report anchors the negotiation.
See module →Watch
Plain-English video explainers from the Capital Toolkit YouTube channel.
Twenty-minute demo. Bring the situation that's driving the engagement (sale, estate, court, tax, internal) and we'll walk through which methodologies and which signoff tier fit.
Don't have a CPA or CBV on the platform yet? Sign up directly, your engagement is temporarily held by a qualified professional on the platform until you bring in your own.
