Understanding and Configuring Business ValuTrack

What is Business ValuTrack?

Business ValuTrack is a tracking tool in Acanthis that estimates the change in your business’s value over time.
It uses a simplified calculation based on financial performance to give you a clear directional indicator — your "North Star" — of how your business value is trending month by month.

Important
The Business ValuTrack metric is not a formal business valuation. It does not constitute a valuation opinion, is not compliant with any valuation standards, and should not be relied upon for legal, investment, or sale purposes. It is intended solely as an internal directional guide for business owners.

Why is Business ValuTrack Important?

While not a formal valuation, tracking an indicative business value can be incredibly powerful.

Key reasons Business ValuTrack matters:

• Strategic Focus: Helps business owners stay focused on activities that grow enterprise value.

• Performance Visibility: Provides a simple way to see the impact of decisions over time.

• Goal Setting: Creates a clear, motivational growth target for business improvement efforts.

• Risk Identification: Sharp declines may prompt earlier investigation into financial or operational issues.
  

How Business ValuTrack Helps Your E-commerce Business

Using Business ValuTrack enables you to:

• Track if profitability improvements are actually translating into higher business value.

• Adjust your strategies to maximise value creation over time.

• Understand valuation drivers like earnings quality, consistency, and business risk.

• Start long-term planning for investment, exit, or succession based on value trends.
  

How Business ValuTrack is Calculated in Acanthis

Acanthis calculates your monthly Business ValuTrack figure using a capitalisation of maintainable earnings approach:

1. Maintainable Earnings:

   • A weighted average of your current financial year earnings (with an option for annualisation or rolling 12 months).

   • Plus earnings from the two prior financial years.

2. EBITDA Basis:
   Acanthis uses EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) from your accounting data.

3. Weighting Adjustments:

   • Different weightings can be applied to each year based on recency and reliability.

   • For example, more recent earnings may be weighted more heavily.

4. Capitalisation Multiple:

   • A multiple is applied to the weighted maintainable earnings to estimate a business value.

   • This multiple can be adjusted to better reflect industry benchmarks, business risk, and growth potential.

5. Monthly Tracking:

   • The Business ValuTrack graph plots the estimated business value month-by-month, allowing you to visualise increases or decreases over time.
     

Adjustments and Customisations

Business ValuTrack recognises that accounting data alone may not give a perfect view.
You can make manual adjustments to the calculation to better reflect real-world maintainable earnings, such as:

• Adding a commercial market salary if the business owner did not pay themselves appropriately.

• Adjusting for one-off or non-recurring expenses.

• Accounting for extraordinary revenue or non-operating income.

• Correcting other anomalies that impact earnings quality.

Recommendation:
It is advised that you consult with an accountant, advisor, or valuation specialist to review and adjust your Business ValuTrack settings for maximum accuracy.

How to Configure Business ValuTrack Settings in Acanthis

Follow these steps to adjust your Business ValuTrack calculation:

1. Navigate to Your Dashboard:
   Log into Acanthis and open your main dashboard.

2. Go to Settings:
   Click on the Settings menu in the left-hand navigation panel.

3. Select Organisation Configs:
   Under Settings, choose Organisation Configs.

4. Configure Monthly Configs:
   Click on Configure Monthly Configs.

5. Select Prior Period:
   Change the month selector to a prior period to view and adjust.

6. Configure Business ValuTrack:
   Click on Configure Business ValuTrack.

7. Make Adjustments:

   • Adjust earnings, add/remove items, modify weightings, or update the valuation multiple as needed.

   • Save your changes.

Your updated Business ValuTrack line graph will automatically reflect any adjustments made.