Example Return on Value Driver’s Model

Below is a sample chart of potential value drivers for the hypothetical middle-market technology company, “Acme Software.” My analysis includes commentary about why and how I rated each value driver, and a rating based on the four key criteria – return, risk, time, and investment. 

Note: I rated the criteria from 1 to 10, with 10 being the most favorable and 1 being the least favorable. For example, a 10 rating for risk means the action is considered low risk, and a 2.0 rating for risk represents a greater risk. A 9.0 rating for investment indicates that a low investment is required, and a 2.0 rating denotes that a significant investment may be necessary. The weighting below will vary significantly from company to company. For example, in a business with underperforming metrics, the potential return on improving a particular value driver may be as high as a 9 or 10, but in a company with favorable metrics, this represents a possible return as low as 2 or 3.

Return on Value Drivers: Acme Software
Value Driver	Return (Potential Return)	Risk	Time(Time Required)	Investment(Investment Required)	Overall Rating
Increase Pricing	10	7	10	10	9.25
Document Comparable Transactions	7	10	10	10	9.25
Reduce Staff-Related Risk	9	8	5	9	7.75
Reduce Concentrations of Risk	7	9	6	5	6.75
Increase Revenue and EBITDA	10	7	4	4	6.25
Conduct an Audit of the Software Code	7	7	6	5	6.25
Strengthen IP	5	9	7	4	6.25
Enhance Sales and Marketing	8	7	5	4	6.00
Increase Cost to Replicate	10	6	3	4	5.75
Increase Recurring Revenue	10	6	2	5	5.75
Strengthen Customer Base	7	4	6	4	5.25
Improve Documentation, Infrastructure and Scalability	7	8	3	4	5.50