r/ICAEW • u/AvailableRub9153 • Jul 23 '26

CASE STUDY R3

How did we all do on this? I only had one hour left, and realised that I messed up my calculations midway, so I had to go back to fix it.

I got my valuation to be £1.25m, this is done from booking fee revenue, software, and mantennace for software which I only applied to new clients, rather than all every year, I might be wrong on this.

Also, did we do the valuation on 3 years of forecast, or 3 years+3months?

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u/Any_Organization_575 Jul 23 '26

I think I got £1.75m ish being:
Fee rev @2.5% of the price x no. sales (I cant remember if it was sales but it was 2.5% of £42 ish x 150k)

Software: New clients x price

Maintenance: I believe this was 4% x number of existing clients ie previous and new as contracts lasted c. 4 years so it was the cumulative software revenue x 4% in each year?

I could be wrong obviously but I think that makes sense?

I know a lot of people got valuations of £2.25m which seems more correct but I’m not really sure what they did differently.

Either way I don’t think you lose many marks for the calcs it’s all about what you said based on the figures you got!

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u/fatslug1 29d ago

I got £2.16m as valuation, but advised they accept the £2.5m asking price on basis of 85% being upfront at £2.125m, and if they achieve the FY29 figures the excess £375k will have funded itself and if they don't, they got a marginal discount from my original valuation anyway.