How To Explain a Valuation Report to Stakeholders

A business valuation report is packed with data, charts, formulas, and narrative—but for stakeholders, it’s often overwhelming. Whether you're presenting the report to a business partner, lender, investor, buyer, or board, your job is to translate the analysis into plain-English takeaways they can act on.

A well-delivered valuation summary builds trust, supports negotiations, and shows you understand your business inside and out.

Step-by-Step: How To Walk Stakeholders Through a Valuation Report

Step 1: Know Your Audience

Before diving into numbers:

• Identify what the stakeholder cares about: Is it investment value? Risk? Future growth?

• Tailor your explanation based on their perspective—finance-savvy lenders need details; employees or partners may want the big picture.

Step 2: Start With the Valuation Summary

Begin with the headline:

• Stated value of the business

• Date of valuation

• Purpose of the report (e.g., sale, loan, estate planning)

Use this to frame the rest of the conversation.

Step 3: Break Down the Valuation Methods Used

Briefly explain the methods the analyst used:

• Income Approach – based on future cash flow or earnings

• Market Approach – based on comparable company sales

• Asset Approach – based on net asset value

Example: “The analyst used the income and market approaches to determine value. The income approach focused on normalized earnings over the last 3 years, discounted for risk.”

Step 4: Highlight Key Drivers of Value

Help stakeholders understand why the value landed where it did:

• Profitability trends

• Customer concentration

• Industry conditions

• Growth potential

• Risk factors and market comps

Step 5: Address Assumptions and Adjustments

Walk through major adjustments:

• Owner’s compensation

• One-time expenses

• Normalization of EBITDA or net income

These show how the valuation reflects real earning power, not just raw accounting figures.

Step 6: Answer Questions Openly

Be ready to discuss:

• “Why is the value lower/higher than I expected?”

• “What’s the basis for the discount rate?”

• “How can we improve this value in the future?”

Use the report to guide—not defend—your answers.

Helpful Tools or Templates

• One-page valuation summary – Provide a digestible summary that includes the final value, valuation methods, and 3–5 key drivers.

• Glossary of terms – Prepare definitions for terms like EBITDA, capitalization rate, market multiples, etc.

• Slide deck – Create a short slide deck with charts or visuals pulled from the report.

Pro Tips from Experience

• Translate the technical. Use phrases like: “This tells us what a buyer would reasonably pay based on the business’s earnings.”

• Don’t get lost in the weeds. Stick to what matters for decision-making.

• Prepare ahead. Review the full report with your valuation provider and ask questions before presenting to others.

• Use analogies sparingly and only if they simplify, not confuse.

Common Pitfalls

Avoid these mistakes when presenting a valuation report:

• Talking only about the number and not how it was determined

• Ignoring the purpose of the valuation (e.g., fair market vs. investment value)

• Skipping the assumptions or normalization adjustments

• Using outdated financials or forgetting to note the valuation date

• Assuming stakeholders understand valuation language

Final Checklist

Before your meeting with stakeholders, make sure you:

• ✅ Know your audience and their concerns

• ✅ Have a one-page summary or presentation ready

• ✅ Can explain valuation methods in plain English

• ✅ Understand the key drivers and adjustments

• ✅ Are prepared for follow-up questions or next steps

  
  

Need help explaining or interpreting your valuation report? Our team at Development Theory can help you break it down clearly and professionally. Book a Discovery Call to get started today.