8.0 – 10.0
High Confidence
The conclusion can carry a transaction, a financial reporting mark, or a board decision as its primary basis, with normal diligence.
Valuation Confidence Rating
The number that explains the number.
Most valuations tell you what a business is worth. The Confidence Rating tells you how much weight to put on that answer, and why. Here is exactly how it is built.
Interactive demonstration
Build the rating
FactorWeightScore
Data Quality
How complete, audited, and internally consistent the financial records are.
Weight22%
Assumption Supportability
Degree to which each key assumption underlying the valuation is grounded in verifiable evidence, market data, or audited history — rather than projection, expectation, or management preference.
Weight20%
Market Comparability
Availability and relevance of comparable transactions and companies in the market at the time of valuation — and how closely they reflect the subject company's size, sector, and risk profile.
Weight16%
Forecast Reliability
Track record and credibility of management projections assessed against actual historical performance, industry benchmarks, and the consistency of prior forecast accuracy.
Weight14%
Business Complexity
How operational, structural, and jurisdictional complexity widens or narrows the valuation range.
Weight12%
Methodology Fit
Degree to which each methodology applied is the most appropriate for the business type, sector, and purpose of the valuation.
Weight10%
Time Sensitivity
An assessment of whether market conditions at the valuation date are introducing meaningful uncertainty into the final number and how sensitive that number is to a shift in those conditions.
Weight6%
Rating bands
What the bands mean
6.5 – 7.9
Moderate Confidence
The conclusion is sound; expect a counterparty to test one or two specific areas, identified in the report.
5.0 – 6.4
Qualified Confidence
The conclusion holds within a wider range; use it alongside the remediation steps identified, not as a standalone negotiating anchor.
Below 5.0
Indicative Only
The evidence available does not support a defensible point conclusion. Use it for internal orientation and close the gaps before relying on it externally.
Worked examples
The evidence changes the answer
Illustrative example — not a client engagement
Industrial distributor — sale process
8.2 / 10
High Confidence
Data Quality9
Assumption Supportability8
Market Comparability8
Forecast Reliability7
Business Complexity8
Methodology Fit9
Time Sensitivity8
Three audited years with no restatements. The forecast is tied to contracted backlog and to the company's own historical conversion rate. Single entity, single jurisdiction. A deep set of public comparables and recent precedent transactions. Forecast reliability sits at 7 rather than higher because management has met plan within roughly 5% — a good record, not a flawless one.
Illustrative example — not a client engagement
Family-owned food manufacturer — succession
5.0 / 10
Qualified Confidence
Weighted average: 5.2. Capped at 5.0 by the Data Quality rule.
Data Quality4
Assumption Supportability5
Market Comparability6
Forecast Reliability4
Business Complexity5
Methodology Fit8
Time Sensitivity6
Unaudited management accounts, with owner compensation and personal expenses running through the business, and one restatement during the engagement. The growth plan rests on a distribution agreement that is agreed verbally but not signed. Three related entities across two jurisdictions, with the operating property held personally by the family. No history of budget versus actual.
Note that Methodology Fit scores 8. The methods applied are the right ones — that is not the constraint. What limits the rating is the evidence available, and the Data Quality cap makes that visible instead of letting it average away.
Two audited years and a signed distribution agreement would move this rating materially.
A lower rating is not a failure of the valuation. It is disclosure about the evidence the valuation had to work with.
In every engagement
Where the rating appears
The rating and its factor breakdown appear in the Valuation Report and in the IC Memo, and the Confidence Rating is one of the four documents in every engagement package.
See the complete deliverable packagePut the number in context.
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