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 DriverReturn (Potential Return)RiskTime(Time Required)Investment(Investment Required)Overall Rating
Increase Pricing10710109.25
Document Comparable Transactions71010109.25
Reduce Staff-Related Risk98597.75
Reduce Concentrations of Risk79656.75
Increase Revenue and EBITDA107446.25
Conduct an Audit of the Software Code77656.25
Strengthen IP59746.25
Enhance Sales and Marketing87546.00
Increase Cost to Replicate106345.75
Increase Recurring Revenue106255.75
Strengthen Customer Base74645.25
Improve Documentation, Infrastructure and Scalability78345.50