Documents Required for a Business Valuation Report

A business valuation report provides an assessment of the value of a business or its shares as of a specific valuation date. Whether the valuation is required for fundraising, M&A, taxation, regulatory compliance, financial reporting, or a business sale, the quality of the valuation depends on the information provided.

The exact requirements vary by business and valuation purpose, but the following business valuation documents checklist covers the key information generally required.

1. Corporate and Ownership Documents

These documents help establish the company's legal structure and ownership:

• Certificate of incorporation and constitutional documents
• Latest shareholding pattern or cap table
• Details of directors and key management
• Shareholders' agreements
• Details of subsidiaries and group companies
• Details of options, warrants, preference shares, or convertible instruments

2. Historical Financial Statements

Historical financial information helps the valuer understand the company's financial performance and trends.

Commonly required documents include:

• Audited financial statements for the last 3–5 years
• Profit and loss statements
• Balance sheets
• Cash flow statements
• Notes to accounts
• Latest management accounts

3. Financial Projections and Business Plan

For valuations using methods such as the Discounted Cash Flow (DCF) method, future projections are particularly important.

These may include:

• Revenue forecasts
• Projected profit and loss
• Cash flow projections
• Capital expenditure plans
• Working capital assumptions
• Tax and financing assumptions
• Business plan

Projections should ideally be supported by operating assumptions such as customer growth, pricing, sales volumes, or production capacity.

4. Debt and Liabilities

Details of the company's financial obligations are important when determining equity value.

Relevant documents may include:

• Loan and borrowing statements
• Debt schedules
• Debenture or convertible debt agreements
• Lease liabilities
• Inter-company loans
• Guarantees and contingent liabilities

5. Business and Operational Information

Financial statements alone may not explain the factors driving business value. The valuer may therefore require information about:

• Products and services
• Business model
• Major customers and suppliers
• Geographic markets
• Production capacity
• Number of employees
• Key management
• Industry and competitive environment

6. Customer and Revenue Information

Customer concentration and revenue quality can affect business risk and valuation.

Useful information may include:

• Customer-wise revenue
• Product or segment-wise revenue
• Recurring versus non-recurring revenue
• Major customer contracts
• Order book
• Customer retention or churn data

7. Intellectual Property and Intangible Assets

For technology, pharmaceutical, consumer, and brand-driven businesses, intangible assets can be significant value drivers.

Relevant documents may include:

• Patents
• Trademarks
• Copyrights
• Software ownership documents
• Technology licences
• Brand information
• Franchise agreements

8. Legal, Tax and Regulatory Information

The valuation professional may also need information about matters that could affect the company's risk or future cash flows, such as:

• Ongoing litigation
• Tax disputes
• Regulatory notices
• Material contracts
• Licences and permits
• Regulatory approvals
• Contingent claims

9. Recent Transactions and Fundraising

If the company has recently raised capital or completed a share transaction, the following may be relevant:

• Investment agreements
• Share subscription or purchase agreements
• Term sheets
• Recent share issuance details
• Previous valuation reports
• Details of secondary transactions

A previous transaction price should not automatically be treated as the current business value because market conditions, transaction terms, and investor rights may differ.

10. Valuation Purpose and Date

The valuation professional should clearly know:

• Valuation purpose: fundraising, M&A, taxation, financial reporting, regulatory compliance, restructuring, etc.
• Valuation date: the specific date as of which the business is being valued.
• Subject of valuation: business, equity shares, preference shares, intellectual property, or another asset.

These factors help determine the appropriate valuation approach and documentation requirements.

Conclusion

The documents required for a business valuation report depend on the company's structure, industry, valuation purpose, and applicable regulations. However, financial statements, projections, ownership information, debt details, operational data, legal information, and intangible asset details generally form the core documentation.

Preparing these documents in advance can make the business valuation process more efficient and provide the valuation professional with a stronger basis for the final valuation conclusion.