Our methodology — what we do, why it's defensible, what we cite
Every ValuCap valuation is built on three valuation approaches set out in IVS 105, applied through DCF, Comparable Companies and Precedent Transactions, and reconciled in a football-field range. Here is exactly how that works, and what we cite.
01 — The IVSC standard
IVS 105: the three valuation approaches
The International Valuation Standards Council (IVSC) publishes the global benchmark for valuation work. IVS 105 sets out the three approaches every credible business valuation must consider: the market approach (CCA, PTA), the income approach (DCF) and the asset approach (book or fair-value of net assets).
IVS 105 does not require all three to be applied in every engagement — but it does require the valuer to consider all three and disclose why any are excluded. Our standard tier applies two; the Comprehensive tier applies all three (DCF + CCA + PTA) and references the asset approach as a floor.
On UK credentials. Unlike property surveying (where RICS membership is the chartered credential), the UK has no chartered credential specific to company valuation. The recognised standards are IVSC-alignment plus a named, qualified signatory — typically ACCA, ICAEW, CFA or equivalent. Every ValuCap report is signed by Abi Shitta (ACCA, FMVA, MBA) for exactly this reason.
02 — HMRC alignment
Aligned with HMRC SVM and ICAEW TECH 03/19
For UK tax use cases (EMI s.431 elections, CGT, IHT), our calculation methodology aligns with the practice that HMRC's Shares & Assets Valuation (SVM) team reads. That means:
- EMI s.431 elections. Actual Market Value (AMV) and Unrestricted Market Value (UMV) calculated consistently with SVM practice notes; restrictions disclosed explicitly so the AMV/UMV split is transparent.
- CGT and IHT. Market-value basis under TCGA 1992 and IHTA 1984 — the price a hypothetical informed buyer and seller would agree, with the assumed disclosure regime each statute requires.
- ICAEW TECH 03/19. The ICAEW guidance on business valuations sits alongside IVS 105 as a practical standard for UK practitioners; we cite it where it shapes a methodological choice.
Scope caveat.
Our reports cover calculation methodology and the underlying assumptions only. They are not tax advice. For tax planning, filings, or correspondence with HMRC, please engage your accountant or a qualified tax adviser alongside the valuation.
03 — Our three-method approach
DCF, CCA and PTA — applied in parallel, reconciled in range
Forward-looking value from cash-flow projections, discounted at the company's weighted-average cost of capital (WACC). Three scenarios — Downside, Base, Upside.
- Pros
- Company-specific. Reflects the actual operating plan, the actual capital structure, the actual investment requirements.
- Cons
- Sensitive to assumptions — small changes in WACC or terminal growth move the answer meaningfully. Demands disciplined sensitivity disclosure.
Market-based valuation using EV/Revenue, EV/EBITDA and price/earnings multiples derived from a curated set of UK-listed peer companies.
- Pros
- Market-grounded. Reflects what investors are paying for similar businesses today — no forecasting risk.
- Cons
- Requires a good peer set. For niche businesses the comparables are imperfect and the methodology must disclose why each peer was included.
Historical M&A deal multiples for businesses comparable in sector, scale and growth profile. Captures the control premium that listed-company multiples miss.
- Pros
- Includes the control premium. Reflects what acquirers — not minority investors — have actually paid in recent deals.
- Cons
- Deal data lags. Public disclosures cover a fraction of UK private-company M&A and the most recent comparable transactions may be 12-24 months old.
04 — The football-field chart
Three ranges, one credible value zone
Each method produces a range, not a point. The football-field chart stacks those ranges side-by-side so the overlap — the zone where every method agrees — becomes visible. We weight the methods, draw the concluded equity-value range, and disclose the weighting in the report.
Illustrative only. Actual ranges depend on the engagement.
05 — Our IP repository
A curated UK peer and precedent transactions database
ValuCap maintains an internal database of UK-listed peer comparables and M&A precedent transactions, organised by sector and refreshed on a rolling basis. Every engagement draws from this repository so each valuation is defensible against the same evidence base.
Every report also captures an audit snapshot of the specific peer comparables and precedent transactions used on the valuation date. That snapshot is retained alongside the report so the data set underpinning the conclusion can be reproduced exactly — even if it is questioned years later.
Forward-looking statement. The repository powers our internal valuation workflow today. Customer-facing automation around peer-set previews and precedent-deal lookups is planned for 2026.
06 — Compliance and governance
What we cite, who's accountable
Standards cited
- IVSC IVS 105 — Valuation Approaches and Methods
- IVSC IVS 200 — Businesses and Business Interests
- ICAEW TECH 03/19 — Business Valuations
- HMRC SVM practice notes (where applicable)
- TCGA 1992 — market-value basis (CGT use cases)
- IHTA 1984 — market-value basis (IHT use cases)
Named signatory
Every ValuCap valuation report is signed by
Abi Shitta
Founder & Principal Consultant
ACCA — Association of Chartered Certified Accountants
FMVA — Financial Modeling & Valuation Analyst
MBA — Master of Business Administration
Named-signatory accountability is the standard our work meets — a deliberate counter to the white-label boutique model.
07 — Sample report
Download a sample report (PDF, ~25 pages)
See the full structure of a Comprehensive-tier valuation — DCF build, peer-set selection, precedent-transaction analysis, football-field reconciliation, methodology disclosure and signed cover letter — on a redacted example engagement.
08 — Frequently asked
Methodology FAQ
Why not just use DCF?
DCF is forward-looking and company-specific, which is its strength and its weakness. It is exquisitely sensitive to assumptions about growth, margin, terminal value, and WACC. Cross-checking against market-based methods (CCA and PTA) is what makes the concluded range defensible — and is also what IVS 105 expects.
What if there are no comparable companies?
We say so in the report and weight the methods accordingly. For early-stage companies and niche businesses the peer set is often thin — in those cases the DCF carries more weight and the CCA is presented as a corroborating range rather than a primary number. The football-field discloses the weighting transparently.
How are control premiums applied?
CCA multiples reflect minority-stake market prices. For valuations of whole-company interests we apply an explicit control premium drawn from PTA evidence — typically 20-30% depending on the sector and deal vintage. Where the engagement is for a minority stake (EMI, for example), no control premium is applied and the report says so.
How current is your peer and precedent data?
Our UK-listed peer comparables database is refreshed quarterly. Precedent transactions are added as deals close and disclosure becomes available. Every engagement captures an audit snapshot of which entries were used on the valuation date — so the report can be re-defended years later against the data that existed at that point in time.
Why are EBITDA multiples sometimes wrong?
Because reported EBITDA isn't a clean number for many companies. SaaS firms capitalise R&D, marketplaces net rather than gross revenue, and one-off costs distort the trailing twelve months. We disclose adjustments in a normalisation tab so the multiple applied to your business and the multiples drawn from peers are computed on the same basis.
Can the report be used for HMRC purposes?
The Comprehensive tier's methodology is built to be HMRC-readable — Shares & Assets Valuation practice notes, ICAEW TECH 03/19, the market-value basis under the relevant tax statute. The report covers calculation methodology and underlying assumptions. For the tax filings themselves — EMI s.431, CGT returns, IHT accounts — engage a qualified tax adviser alongside.
What if HMRC challenges the valuation?
Two safeguards. First, the methodology disclosure makes the calculation reconstructible cell-by-cell from the inputs — there are no hidden adjustments. Second, the audit snapshot of peer comparables and precedent transactions used on the valuation date is retained, so even years later the data set the report was built on can be reproduced exactly.
Do you defend the report if it's questioned?
Yes — Comprehensive tier engagements include a documented defensibility position. Where a challenge proceeds to a more formal forum, additional engagement is scoped and quoted separately under the CFO & Advisory service. We do not provide tax advice or legal representation in our own right.
Ready to commission a valuation?
Three tiers from £350. Signed by your named consultant.