Modelling the busness in detail to unlock the intrinsic value
Modelling a business is complex yet it typically boils down into the following components; inputs (sales/revenue), outputs (expenses/capital investment), interactions between assumptions, variances in cashflow as strategic decisions are made, which can include one off projects, large transactions and events.
The final intrinsic value is a combination of the discounted cashflows, the internal rate of return amongst other qualitative and quantitativefactors in the business which the business modellig uncovers.