Valuations of Projects Financial Management and Projections – 3 Key Takeaways

Whether it is selling a business, raising funds or giving employees stock options, valuations play an important role in the growing and scaling businesses. In order to acquaint DIHs and other ecosystems support actors with the basics of project valuations and financial  management, ATBN in collaboration with AfriconEU hosted a capacity building webinar titled “Valuations of Projects, Financial Management and Projections”. The main speaker, Kenneth Legesi, is the CEO/CIO at Ortus Africa Capital. Kenneth’s experience spans the venture, entrepreneurship, infrastructure, real estate, financial advisory, and investment sectors across Africa and the UK.

In this webinar, Kenneth spoke about why and how valuations are done and gave practical cases for discussion. He also spoke about the methods for venture valuation with examples and the role of financial management and projections in supporting valuations.

You can watch the webinar here.


The 3 key takeaways from the webinar are summarised below:

  • What is business valuation?

Valuation of a business, project or asset is based on expected future performance and not past performance. Valuation involves analysing the financial history and prospects of the business/project/asset and using that information to forecast its future operations. An analysis of the industry and the economic environment of the business/project/asset is also performed and there are a number of different valuation methods that can be applied in order to arrive at a value depending on the objective for the valuation.


  • Business Valuation Methods:

The three most commonly used valuation methods include: the income approach, the asset approach and the comparable approach. Other valuation methods (berkus, risk factor summation, scorecard, etc) exist but they are variations of these three major ones. These variants are mostly used for startups at the very early stage of business.

The Income Approach: This is based on the discounted cash flow method. The valuator looks at the cash the business is going to make in the future and discounts it to today’s value.

The Asset Approach: This approach focuses on what the tangible assets of the business are and then the owner is paid the value of the assets.

The Comparable Approach: The valuator looks at and compares previous valuations that have been done for other businesses that are similar to the business being valuated or based on similar business transactions with the business in question. 


  • Benefits of good financial management

Financial management and projections support valuations in a number of ways:

Firstly, having good financial management practices and being able to derive good projections provides an unbiased view of the business’ economic status and the path likely for the business to take in  the future. Thus it gives a correct forecast of the business’ future operations thus making valuation more effective.

In addition, practising good financial management and deriving the correct projections helps the business establish long-term goals for success. Once the business knows their goal or what type of valuation they are after, they are able to make intentional commitments and contributions towards achieving them.

Finally, having strong financial processes enables a  business to compare itself to the market and see how they compete with the wider economy using the rate at which their business is flourishing. Based on reports from financial management and projections, businesses can tell if they are falling or growing or exceeding milestones as predicted.



Certain markers attest to good financial management. A key one is the ability to file your tax returns and being able to obtain a tax clearance certificate from your tax authority. This is because, in many jurisdictions, the tax authorities before issuing a tax clearance certificate requires the business to fulfil several financial management obligations to confirm the viability of the business. Investors look out for this most of the time as a good sign of a healthy business to invest in.For anyone to make good financial projections, they should have a good working knowledge of accounting and finance, Microsoft excel and good logical problem solving skills.

Watch the complete session on YouTube to learn more about Valuations of Projects, Financial Management and Projections.


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