Real Options Analysis

A forecasting and valuation technique based on the logistic growth function, which models the adoption or diffusion of technology, products, or innovations as a characteristic S-shaped curve with slow initial growth, rapid acceleration, and eventual saturation. S-curve analysis is used in intangible asset valuation to project revenue trajectories for technology assets, assess the remaining useful life of patents, and evaluate where a product sits in its lifecycle.

A valuation and risk assessment technique that evaluates potential outcomes by modelling different sets of assumptions about key variables such as growth rates, margins, and discount rates. Scenario analysis is essential for intangible asset valuation because the future cash flows attributable to intangible assets are inherently uncertain.

A valuation methodology that estimates a company's value by analysing the prices paid in comparable M&A transactions. Precedent transactions incorporate control premiums and strategic value that may not be captured in public market comparables.

A valuation methodology that estimates a company's value by comparing it to similar publicly traded companies using financial ratios such as EV/Revenue or EV/EBITDA. Comps provide a market-based reference point but may undervalue intangible-heavy businesses if peers are not well matched.

A productivity measurement technique that compares a firm's or sector's performance against the theoretical maximum output achievable with given inputs. Frontier analysis methods, including data envelopment analysis and stochastic frontier analysis, reveal inefficiencies and quantify the productivity gap attributable to underinvestment in intangible assets.

A method of testing how changes in individual assumptions — such as discount rate, growth rate, or royalty rate — affect the estimated value of an asset or business. Sensitivity analysis is a critical component of intangible asset valuation, revealing which inputs have the greatest impact on the result and informing risk assessment.

A financial analysis used in M&A to determine whether a proposed acquisition will increase (accrete) or decrease (dilute) the acquirer's earnings per share. This analysis is particularly sensitive to how acquired intangible assets are valued and amortised post-transaction.

A method of segmenting customers into groups based on shared characteristics or time of acquisition, then tracking their behaviour and value over time. Cohort analysis is essential for understanding customer lifetime value trends, retention dynamics, and the true unit economics of growth-stage businesses.