BVX logic interprets the valuation results and flags (or color codes) areas that need attention. Appropriate cells change their color to magenta (or purple) under following conditions:
1) Buyer Expected ROE cell and the corresponding Actual Buyer ROE cell in the Output Summary turn magenta whenever expected ROE is different than actual ROE.
2) BVX Cash Flow cells turn magenta whenever the cell value is negative.
3) Gap (Seller) Note cells turn magenta whenever actual Gap (Seller) Note in the Output Summary is different than the input value.
4) The Goodwill cell turns magenta whenever Goodwill is negative.
5) Taxable Income cells in the Output Summary turn magenta whenever Taxable Income is negative.
6) Revolver+Term Debt cell in the output section turns magenta whenever the actual bank borrowing is less than the available bank borrowing. The available bank borrowing consists of borrowing against A/R, Inventory, and Fixed Assets.
7) Over Adv Loan+Mezz cell in the output section turns magenta whenever actual Over Advanced Loan borrowing is less than the available Over Advance Loan amount.
8) Real Estate ROE cell turns magenta whenever Real Estate E ROE is negative.
9) Exit EBITDA Multiple label will change to "Exit Multiple capped @" whenever PM has been chosen for exit multiple and the actual exit multiple has reached the cap entered in Max. Exit Multiple. The label will change color to purple.
10) Mezzanine Warrants cell in Output Summary turns magenta whenever the actual mezzanine ROE is not equal to expected mezzanine ROE.
11) Final Adj. EBITDA cell turns magenta if its value is less than 2%. User should check if this value is correct. BVX will still function. However, such low margin may not be sufficient to satisfy the cash flow needs of the business (which is determined by growth, balance sheet, and capital expenditures). In this situation, there is no cash available to satisfy buyer's return on investment and hence BVX will come up with No Solution.