The S-Squared Triangulation

At S-Squared, we don’t just plug numbers into a spreadsheet; we build a narrative supported by market data, economic analysis, and academic rigor. We analyze every business through three intersecting lenses:

 1. Quantitative Health: Normalizing for Economic Reality 

We strip away tax-driven accounting to reveal a business’s true profitability. Some examples:

• Tax-to-Internal Reconciliation: We bridge the gap between tax filings and internal ledgers.
• Normalization: We adjust for owner-discretionary expenses and one-time events to establish Sustainable Adjusted EBITDA.
• Proof of Cash: We tie bank deposits to revenue to ensure earnings are backed by actual cash inflows, not just accounting entries.

 2. Qualitative Drivers: De-Risking the Multiple 

Numbers show the past; qualitative factors predict the future. We stress-test the pillars that determine your risk-adjusted multiple. Some examples:

• Concentration & Loyalty: We map revenue distribution and retention to prove a lower risk profile and justify a higher valuation.
• Liquidity & Working Capital: We analyze the Cash Conversion Cycle. A low DSO (Days Sales Outstanding) proves high "cash convertibility," a massive value driver for buyers.
• Founder Dependency: We document proprietary systems and management depth to mitigate "Key Person" risk and ensure business continuity.

 3. Market Reality: Bridging Intrinsic & Transactional Value 

We ground theoretical models in real-world evidence using advanced statistical modeling. Some examples:

• Guideline Transaction Method (GTM): We benchmark against private company acquisitions, adjusting for size and sub-sector to ensure an "apples-to-apples" comparison.
• Monte Carlo Simulation: We run up to 1,000,000 iterations of your forecast. This replaces static numbers with a defensible "Range of Value" that accounts for market volatility.
• Specific Risk Premiums: We apply robust models to calculate franchise and asset-specific premiums, ensuring your final value reflects your unique market position.