Software FAQs

The Q-Score is a measurement of a company’s risk profile. The Q-Score is based on a proprietary algorithm developed by Quist Valuation and reflects the culmination of Quist Valuation’s several decades of experience valuing thousands of companies. While each company is unique in its own way, there are common characteristics across all companies that need to be in place to drive value.

The maximum Q-Score is 850 and is comprised of Six Business Value Drivers: 1) Strategic Value, 2) Organizational Value, 3) Employee Value, 4) Customer Value, 5) Financial Value, and 6) ESG Value. Not every Business Value Driver carries the same weight and not every question has the same importance in our calculation of the Q-Score.

The higher the score, the better your company is doing in creating value and managing risk.

Spotlight uses a market-based approach, specifically a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization).

Advanced uses a Discounted Cash Flow (DCF) methodology.

The source of the market multiples on the Quist Insights platform is based on a query of the DealStat M&A Transaction database and our professional judgement and experience. In general, market multiples reflect transactions that have occurred over the trailing 3 year period, companies that generate at least $1.0 million in revenue and companies that generate some level of profitability.

Enterprise Value (Equity + Debt – Cash)

The DCF analysis reflects a company’s future expected cash flows, discounted to a net present value. EBITDA (after-tax) can be used as a proxy for a company’s projected cash flows. A company’s cash flow projections should also be adjusted for the cash needed to generate future projected growth (i.e., working capital and capital expenditures).

The discount rate utilized to calculate the net present value of a company’s future expected cash flows is the required rate of return on the investment in the subject company. Investments with higher required rates of return are typically viewed as having higher perceived value than those investments with lower required rates of return. As such, a company’s discount rate is also seen as a proxy for risk.

Quist determines an appropriate discount rate for each company based on its stage of business, intangible value drivers, and market evidence.

No. The range of value provided in the Spotlight and Advanced products are an Estimate or Calculation of Value. Spotlight utilizes a market based approach based on an EBITDA multiple, and Advanced utilized an income based approach based on a discounted cash flow method.

An Opinion of Value or an Appraisal of Value consists of an analysis and report resulting in an expert opinion that is governed by the professional and reporting standards of the American Institute of Certified Public Accountants and the National Association of Certified Valuation Analysts. An Opinion of Value will employ multiple valuation methodologies and adhere to more rigorous reporting requirements.

Quist Insights – Spotlight. 10 to 15 minutes. Spotlight is simple to use and requires answering 6 questions about Owner Readiness, 6 questions about Business Attractiveness, and entering an annual revenue and EBITDA metric.

Quist Insights – Advanced. 60 to 90 minutes. Advanced is a deeper dive analysis of your business and requires answering 65 qualitative questions. Additionally, you will be asked to provide the following financial information: cash balance, debt balance, 3 years of historical revenue, expense and profit information, 3 years of projected revenue, expense and profit information, net working capital as a percent of revenue, capital expenditures as a percent of revenue, and tax rate. Click here to download an easy to use template.

Quist Insights – Spotlight is designed to help Advisors initiate a conversation with owners who are curious about or in the initial stages of planning for eventual business exit. The solution helps business owners understand their potential readiness and attractiveness for exit. Spotlight gives owners information about their business value, their Value Gap, how their profitability compares to similar businesses and identifies potential business issues that could improve the business’ value. While focused on starting the process of planning for exit, Spotlight also serves as a “bridge” to our Advanced solution which will provide a deeper dive business assessment.

Quist Insights – Advanced is designed to help Advisors perform the “Triggering Event” of the Exit Planning Institute’s Value Acceleration Methodology (“VAM”). The solution enables owners to experience a deeper-dive assessment into their business, helping them understand the factors and risks that determine and drive business value. The solution’s framework shows owners how their management of key tangible and intangible assets impacts value, score their performance, and provides actionable recommendations to improve their business’ value.

Quist Insights – Spotlight has been designed to be a simple DIY solution for Advisor clients. It has an easy to initiate set-up process and asks 12 questions: 6 about the state of the business and 6 about the state of the owner. Answering questions and inserting a current revenue and EBITDA # provides an output report in less than 10 minutes. The solution provides partner links making it easy for Advisors to embed the solution onto their website or in outreach campaigns and generate new client opportunities. Our easy set up process enables Advisors to determine whether they want clients to immediately see the output results or contact Advisor for access.

Quist Insights – Advanced has been designed to provide Advisors with maximum flexibility when interacting with clients. Advisors access an easy to initiate set-up process and can choose to have clients answer all 65 qualitative questions and insert the financial data or participate with their clients throughout the process. Our set up process enables Advisors to determine whether they want clients to immediately see the output results or contact Advisor for access. Advanced enables the Advisor to customize client reports through an annotation capability.

When setting your company up on our Quist Insights platform, we will ask you to select your sector and industry as defined by NAICS code. Go to www.naics.com/search to search the NAICS database and determine the correct code for your business.

You can contact Ken Bero, Director of Sales for any questions.

Email: kbero@quistinsights.com
Phone: 978-996-8337