New to this? Plain-English meaning of every term
This tool puts a realistic dollar figure on each thing in your improvement plan, then adds them up. The finance words below all have simple meanings; you don't need a background in finance to use it.
- Set your starting point at the top: your baseline EBITDA (roughly, your annual operating profit today), your target, and the valuation multiple a buyer in your sector would pay.
- In the first table, list the initiatives that add profit (win more revenue, lift margin, cut cost). For each, enter the full annual prize, how much of it you'll realistically capture, the costs, and your confidence.
- In the second table, list work that doesn't add profit but makes it safer, like reducing reliance on one big customer or on you. That work lifts the multiple a buyer will pay, not the earnings.
- Read the totals: how much value the plan creates, and how much of it is still just a promise (not started or at risk) versus banked (delivered).
- EBITDA
- A common shorthand for annual operating profit, before interest, tax and accounting write-downs. Treat it as roughly "the profit the business makes from trading each year".
- Valuation multiple
- What a business sells for, expressed as a number of times its EBITDA. A 5x multiple means a buyer pays five years of profit. Bigger, safer, faster-growing businesses fetch higher multiples.
- Gross opportunity
- The full annual prize if an initiative worked perfectly, before any discount for reality. For a cost saving, it's the size of the saving.
- Capture
- The share of that full prize you'll realistically get. 100% means everything; most sensible plans sit well below that.
- Ongoing cost
- Any new yearly cost the initiative creates (extra staff, tools, licences). It's netted off the yearly benefit.
- Implementation
- The one-off cost of making it happen, spent once. Netted against the value it creates at the bottom line.
- Capex
- One-off spend on equipment or assets (short for capital expenditure), as opposed to day-to-day running cost.
- Confidence
- How sure you are it'll land, as a percentage. The tool multiplies the value by this, so a shaky 50% initiative counts for half.
- Committed EBITDA
- The profit an initiative is expected to add after all of the above: (prize × capture − ongoing cost) × confidence.
- Multiple uplift
- How much you'd raise the valuation multiple by making earnings safer. Removing a big risk might move it 0.25x or 0.5x, which is real value even with no extra profit.
- Re-rating
- The value created purely by that higher multiple, when the same profit is judged safer and therefore worth more.
Where you are, and where you're going
Value initiatives (revenue, margin and cost reduction)
Committed EBITDA = (gross annual opportunity × capture rate − ongoing annual cost) × confidence. A cost reduction is just an opportunity whose gross figure is the saving. Implementation cost and capex are the investment to get there, netted against value at the enterprise-value line below.
| Initiative | Gross opp (annual) | Capture | Ongoing cost (annual) | Implementation (one-off) | Capex | Confidence | Status | Committed EBITDA | |
|---|---|---|---|---|---|---|---|---|---|
A$ | % | A$ | A$ | A$ | % | ||||
A$ | % | A$ | A$ | A$ | % | ||||
A$ | % | A$ | A$ | A$ | % |
Risk-reduction & re-rating (work that lifts the multiple, not EBITDA)
Some of the most valuable work adds no EBITDA. Removing a concentration, a dependency or an unmanaged risk makes the earnings more certain, and a buyer pays a higher multiple for certainty. Committed EV = multiple uplift × forecast EBITDA × confidence.
| Initiative | Multiple uplift | Implementation (one-off) | Capex | Confidence | Status | Committed EV gain | |
|---|---|---|---|---|---|---|---|
x | A$ | A$ | % | ||||
x | A$ | A$ | % |
Net enterprise value the plan creates
Gross value of A$5.29M created, less A$450K of one-off cost and capex to achieve it.
Committed EBITDA uplift
A$835K
EV from re-rating
A$1.12M
Investment to achieve
A$450K
EBITDA bridge to target
How real the value is today
Split by enterprise-value contribution. Value only counts once it lands in the accounts; the bottom line is the part still living on a slide.
A Commercial Assessment values the opportunities properly; the APG Platform gives each one an owner and reconciles it against your accounts every month.
Illustrative, and honest about it. Committed value is an estimate made before the work happens, and early estimates are usually wrong in both directions. Capture, cost, confidence and multiple uplift are your judgements, not facts. Re-rating value is applied to forecast EBITDA and is the softest number here, since a buyer decides the multiple, not you. Investment is netted at the enterprise-value line rather than discounted over time. The gap to target is left open on purpose: filling it with an assumption is how most plans overstate. Not financial advice.
A recommendation is worth nothing until it's valued, owned and reconciled.
Every recommendation evidenced, every initiative valued, every commitment owned, every result reconciled. That is the loop the APG Platform closes, and a Commercial Assessment is where it starts.
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