Many experts would answer the question in the title with a resounding 'no'. They would agree that at least half of a valuation should be based on the strength of the financials. However, they would be quick to add that the remainder should be based on non-financial/subjective analysis. For example:
The Industry: A company has more value if the company's industry is growing, and the industry does not have too much foreign competition, on-going price wars, etc.
Geographic Location: The value of a company can be influenced by its location. For example, does the state in which the company is located have a solid work force and/or favorable tax structure?
Management: A company with a solid management team can be a strong plus.
Facilities: Up-to-date fixtures and equipment plus a long-term lease with a reasonable rent structure will increase a company's value.
Customers: A large and varied customer base as opposed to a few large customers is a huge plus. This, along with recurring revenue from long-time customers, can definitely increase a company's worth.
Competition: One expert said that a business is worth more if it doesn't have to battle with a Microsoft or Costco.
Products or Services: A company is worth more if its products or services are proprietary or a known brand.
Suppliers: Value increases when a company is not dependent on just one or two major suppliers.
