Inarva Valuation Framework

M&A · USA / North America · 2025–26
USD / INR ₹
Bucket 1 Revenue & Profit
Total revenue for the period
After all operating expenses
Bucket 2 Accounts Receivable
Outstanding invoices raised
Committed future revenue
Bucket 3 Pipeline
Unsigned opportunities in flight
Unqualified / future opportunities
Risk Adjustment
Drives customer concentration discount
Retainer revenue won't transfer with the company — discount = % × 0.40
Bucket 4 Human Capital — Resources
Resource Name Level Fixed Pay Variable Pay Total Comp
Team Total
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Valuation Formula Guide

How each input drives the final number — Conservative · Base · Strategic
Conservative
Base Case
Strategic
Bucket 1 Revenue & Profit
The higher of the Revenue valuation or Profit valuation is used — the model never double-counts. Revenue multiples are blended by the % of recurring revenue you enter.
Component Conservative Base Strategic
Project revenue multiple 0.80× 1.25× 1.75×
Profit multiple 2.50× 3.00× 4.00×
Bucket 1 = max(Revenue × Revenue Multiple,  Profit × Profit Multiple)
Example: At $100K revenue (Base 1.25×): Revenue val = $125K · Profit val (at $25K, 3.0×) = $75K → take $125K
Bucket 2 Accounts Receivable
Near-certain cash — invoices already raised and contracts already signed. A haircut is applied to reflect typical collection risk.
Component Conservative Base Strategic
Unpaid Invoices (AR) AR × 90% AR × 95% AR × 100%
Signed SOWs / Backlog SOW × 85% SOW × 90% SOW × 95%
Bucket 2 = AR (haircut) + SOW (haircut)
AR is valued near face value — the discount reflects bad-debt risk and payment delays. SOW backlog is slightly more discounted because delivery hasn't started.
Bucket 3 Pipeline
Probabilistic future revenue. Active proposals are more likely to close than early-stage forecasts, so they receive higher weights.
Component Conservative Base Strategic
Active Proposals (sent) Pipeline × 20% Pipeline × 30% Pipeline × 45%
Forecasted / Early Stage Forecast × 10% Forecast × 15% Forecast × 25%
Bucket 3 = Weighted Active + Weighted Forecast
Conservative weight reflects typical SMB services win-rates. Strategic weight reflects a buyer who believes they can close pipeline faster with their distribution.
Risk Risk Adjustment
Two risk factors reduce the pre-total. Both are applied as a single combined percentage discount to the sum of Buckets 1–3.
Customer Concentration Discount
Top client ≥ 50% of revenue − 30%
Top client 40 – 49% − 20%
Top client 30 – 39% − 12%
Top client 20 – 29% − 5%
Top client < 20% No discount
Retainer Non-Transfer Discount
Retainer revenue is relationship-dependent and may not transfer to a new owner.
Discount = Retainer% × 0.40
Example: 30% retainer → 30% × 0.40 = 12% additional discount

Total Discount = CC Discount + Retainer Discount
Applied to: Pre-Discount Total (Buckets 1–3 sum)
Overall Valuation Formula
Step 1 Bucket 1 = max(Revenue × Blended Multiple,  Profit × Profit Multiple) Step 2 Bucket 2 = AR (haircut) + SOW (haircut) Step 3 Bucket 3 = Pipeline (weighted) + Forecast (weighted) Step 4 Pre-Total = Bucket 1 + 2 + 3 Step 5 Discount = Pre-Total × (CC Discount + Retainer Discount) Final Valuation = Pre-Total − Discount