Modelling assumptions explained
Please note that in the preparation of the various scenarios you can create with Jazoodle, there are a number of underlying assumptions that you should be aware of when you come to interpret the outputs.
Jazoodle’s proprietary forecasting model has been built using the assumptions stated below for the creation of a “base year model”. The base year model is important because all subsequent forecasts are derived from this.
When data is uploaded within 3 months after the end of a previous complete financial year, Jazoodle uses the last complete financial year data as the base model. For instance, if the end of the financial year is June 30th and a forecast is ran on August 1st, Jazoodle uses the previous complete financial year data as the base model.
As the Jazoodle forecasting model can be used all year round, if a last complete financial year data upload is over 3 months old – for example the financial year end is June 30th and a forecast is ran on November 1st, we use an extrapolation of the current year’s data as the base model. This then takes into account both historic data, as well as tracking data from the current financial year to base the forecasts on.
Earnings per Share – It is impossible to determine how many shares a company has issued, outside of the paid up share capital figure detailed in a balance statement. For this reason, Jazoodle uses the Paid Up Capital amount from your balance sheet and makes the assumption that the paid up capital was issued at $1 per share. Therefore the number of shares issued equals Paid Up Capital / 1.
Price Earnings – If the company is privately owned, there is no data relating to how a market would value each of the company’s ordinary shares. A market valuation would take into account areas not measured such as industry risk and general economic and market conditions etc. For this reason, we assume that the market value equals the book value of the equity of a company.
Indicative Valuation – These estimates have been prepared in accordance with APES225 accounting standards. Please note the true value of a business is the price that a buyer is prepared to pay, and the price that a seller is prepared to sell the business for. That value may, or may not, coincide with the estimate provided by Jazoodle.
The Jazoodle™ solution, used to compile this indicative value, makes no representation, nor warranty as to the performance of the business in future financial periods and years. Potential viewers of these estimates may use them as a source of general information on which to base a decision as to whether to further investigate the utility of the analysed business, however, must use their own investigations and due diligence in ascertaining the value to them based upon their own circumstances, general assumptions, assumptions about future trading and economic conditions, and business needs. Please also note, where trading history is short, i.e. 1-2 years, the potential variances in future performance can be greater than that described, and such indicative amounts should be read with caution.