Value Recon is Value Scout's value estimate algorithm. Our algorithm benchmarks your company's performance in conjunction with valuation principles to correlate value to completing a task.

Basic and Advanced Modes

Users can use basic or advanced modes to estimate the value associated with completing an objective or initiative.

The difference between Value Recon basic and advanced

  • The basic mode allows a user to input the amount of value they believe an objective or initiative will create.

  • The advanced mode uses an algorithm to estimate the amount of value completing an objective or initiative will create.

How to Use V.C.S.

  1. Navigate to Annual or Quarterly Plan on the main menu

  2. Click an existing objective or initiative, or click "New Objective" in the top right

  3. Click "edit details" and hit "Advanced" or "Basic" based on which module you want to use

  4. Enter the necessary fields

  5. Click confirm changes

Types of Value Creation Strategies

Value Scout has five different V.C.S: +Revenue, Gross Margin, Cost Out, Acquisition, and -Risk.

Revenue

When creating an objective that will result in increased revenue, users should select "+Revenue" as a V.C.S. option. Value Scout's V.C.S algorithm then estimates how much value will be created based upon the user's estimated revenue input.

Gross Margin Improvement

If a product or service's profitability can be improved by lowing the associated costs of production (labor or materials), users should select "Gross Margin" as a V.C.S. option. Value Scout's V.C.S. algorithm then estimates how much value will be created based upon the user's gross margin improvement and impacted revenue inputs.

Cost Out

Businesses often have costs that do not meet the criteria for a valuation adjustment and thus cannot be adjusted off the P&L in a valuation exercise. These costs should be removed or reduced in the business to improve the bottom line. Users should select "Cost Out" as V.C.S. option in which Value Scout's algorithm will calculate how much value will be created as a result of the direct increase to EBITDA.

Acquisition

Growth can be achieved organically or through acquisitions. If a business owner and the rest of the executive team are considering an acquisition, "Acquisition" as a V.C.S. should be selected. Value Scout's algorithm will calculate an estimated value based upon the acquisition's EBITDA and debt raised for the acquisition.

Did this answer your question?