A valuation report is not written for the owner who commissions it. It is written for the buyer who will try to take it apart, the bank that may finance part of the price, and the lawyer who drafts the sale agreement around its numbers. A report that only has to satisfy the person paying for it rarely survives that scrutiny, and an owner who finds this out only after a buyer has rejected the number has already lost time and leverage he will not get back. What follows is what we put in every report we write, and why each part is there.
Who is actually reading it
An owner reading a valuation for the first time wants one number, confidently stated: this business is worth X. A buyer reading the same document wants the opposite: a number built from pieces they can check, each one traceable to a source they could ask for themselves. The two audiences pull a report in different directions, and a report written to please the first audience usually fails the second, which is the audience the price actually depends on.
The three checks, shown as working, not just a conclusion
We run three separate checks before a range goes in front of an owner, and the report shows the working for each one rather than only the result.
The first is verified seller's discretionary earnings multiplied by a market range. For owner-operated businesses in the AED 2 to 10 million range, that range currently runs 2.0 to 3.5 times SDE, and a defensible report states where in that range a given business sits and why: growth trend, customer concentration, owner dependency, and the quality of the records behind the number.
The second is the buyer-yield test. A buyer financing part of the price, or simply allocating their own capital, wants to know what the business returns on the money invested once the owner is replaced with a paid manager. A price that does not clear 25 to 35 percent of invested cash each year under that scenario is a price the buyer cannot justify, however much the seller wants it, and a report that skips this check is handing the owner a number the market will not pay.
The third is the asset floor: what the business is worth if earnings stopped tomorrow and it were simply the assets on the balance sheet, net of what is owed. A services or trading business usually has a low floor and the earnings multiple carries the value. A business holding property, vehicles or stock can have a floor that sets a minimum the earnings multiple should never fall under.
A report that states a number without showing all three checks is asking to be trusted rather than verified, and buyers in this market do not extend that trust to a stranger's spreadsheet.
A short worked example
Take a trading business reporting SDE of AED 900,000 after verified add-backs, against a market range of 2.0 to 3.5 times. A straight multiple calculation alone would support AED 1.8 million to 3.15 million. Run the buyer-yield test at the top of that range and the arithmetic changes: at AED 3.15 million, once a market-rate manager's salary comes off the top, the business needs to return 25 to 35 percent of that purchase price in cash each year to clear the test, and if verified cash flow cannot support it, the top of the range is not available to this buyer whatever the multiple alone implies. The asset floor is checked last. If the business holds AED 600,000 of net tangible assets, that figure sets the minimum the range should never fall under in a bad year. The range we deliver is the point where all three checks agree, not the output of whichever one produces the most flattering number.
Every number has a source
Behind each figure in the report sits a specific document: a VAT return, a bank statement, a payroll file, the trade licence, the tenancy contract. We cite the source next to the figure rather than presenting a clean summary that could have come from anywhere. If a buyer later asks where a number came from, the report has already answered the question, and the answer is a document rather than our word for it. We cover how those source documents get reconciled against each other in our guide to how buyers verify profit.
This is also why a report takes 48 to 72 hours rather than ten minutes. A multiple applied to a number the owner read off a management account is not a valuation. It is a guess with a decimal point, and we will not put our name on one.
What is actually inside the document
The report follows a fixed structure so a reader always knows where to look.
- The range, with the single-sentence reasoning for where in that range the business sits.
- The SDE build-up: reported net profit, each add-back listed against the document that supports it, and the resulting verified SDE.
- The three checks, each shown with its inputs and its result, not only its conclusion.
- What could not be verified, and how it was treated. A defensible report states what it could not confirm as plainly as what it could.
- A source index, so every figure can be traced back to a specific VAT period, bank statement or payroll file without a follow-up email.
A range, not a point, and the reasoning behind it
Every report states a range, never a single figure, because a single figure implies a precision the underlying evidence does not support. What matters more than the range itself is what moves a business within it: a concentrated customer base against a diversified one, a general manager already running the business day to day against an owner who is the business, three years of clean filed VAT returns against two years with gaps. We state these factors explicitly rather than leaving the owner to guess why the number sits where it does, because an owner who understands what moves the number is an owner who can go and move it before he sells.
What the report is not
A valuation report is not a fairness opinion, not legal advice and not tax advice. It does not value goodwill using methods built for listed companies, and it does not treat the licensing structure or the shareholding as an input, because those are matters for counsel. Where a transaction raises a licensing, residency or tax question, the report flags it and points the owner to the right adviser rather than answering it, because improvising on those questions costs more than it saves.
What makes a report fall apart under questioning
We see three patterns that sink a valuation the first time a serious buyer reads it. The first is a multiple taken from a rule of thumb heard at dinner or read online, applied with no reference to this market or this business's own numbers. The second is earnings left unadjusted for a market-rate replacement for the owner, which overstates what a new owner actually keeps. The third is a report built entirely from figures the owner supplied, with no attempt to reconcile them against VAT returns, bank statements or payroll, so the number collapses the moment a buyer checks it against anything else.
Each of these produces a number that looks confident on the page and falls apart within the first conversation with a buyer's adviser, and the owner is the one who pays for that collapse, in time, in credibility, and usually in price.
How a defensible report changes the negotiation
A report a buyer can check rather than has to trust shortens diligence rather than lengthening it. A buyer's lawyer who can trace every figure to a filed document spends less time asking for the underlying papers, because the report has already produced them. A bank considering acquisition finance can underwrite against a report that shows its working in a way it cannot underwrite against a single number with no evidence behind it. None of this guarantees a particular price. It does mean the number both sides agree on is a number both sides can defend, which is the only kind of number that survives to completion.
If your business sits in the AED 2 to 10 million range, our valuation service runs this exact process and returns a written range in 48 to 72 hours once the records are with us. For how that range feeds into a full sale from first conversation to completion, see our process. Buyers assessing a business already on the market can see a comparable process from the other side at UAE Dealroom.
Written by Joseph Coello, Founder, Coello Advisory. Questions on a specific report go to WhatsApp.