#$%^&*AU2019201308A120200910.pdf#####1/1 1 THE WATSON PERFORMANCE MODEL 2 Abstract 3 The inventors identified a gap in the commercial market between the provision of business 4 valuation services and the provision of business analysis services. Business valuation services are 5 usually provided in the context of an upcoming transaction, such as the purchase/sale of a business 6 or a finance application, while business analysis services are generally aimed at improving 7 business performance. Both of the above, seemingly related, services are typically offered in 8 isolation in today's commercial market and can be quite costly for business owners to acquire. The 9 primary reason for the separation between these two services appears to be due to the fact that 0 most of the valuation methods typically used to value a business, for example earnings multiples, 1 cannot be directly linked to key business performance indicators such as return on assets. As 2 depicted in Chart 1, the Watson Performance Model the inventors have developed provides 3 business owners with both a notional value of their business and, more importantly, the key 4 drivers/performance indicators that impact that value. Further, the Watson Performance Model 5 allows business owners to access this information in both a timely and cost effective manner 6 through a software application that has been developed by the inventors.1/2 THE WATSON PERFORMANCE MODEL 2 Drawings 3 Figure 1 Notional Business Value Notional Equity Closing Net Value Debt F Average Equity + Notional Goodwill Abnormal Profit X Goodwill Factor FF Average Equity x Return on _ Required Rate Equity of Return Operating Return on Financial Assets Leverage Gain Operating X Operating Spread Net Financial Margin Asset Turnover X Leverage
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