Why a Company Valuation Is a Range, Not a Number
Bankers present a valuation not as a single figure but as a range of ranges, one per method, displayed as a chart. The football field admits that valuation is uncertain and triangulates rather than pretends to precision.
Valuation Is Not a Single Number
It is tempting to think a company has a single correct value that analysis can find. It does not. Every valuation method rests on assumptions and produces a range depending on those assumptions, and different methods produce different ranges. Valuation is inherently uncertain, and pretending otherwise, insisting on one precise number, is a mistake.
The football field is how bankers present this honestly. It is a chart showing the range of values produced by each valuation method, stacked as horizontal bars, so named because the resulting chart of overlapping bars resembles the markings of a sports field. It displays valuation as what it is: a set of ranges from different methods, not a single figure.
No method gives the true value, so you run several and show what each says. Where the ranges overlap is your best guess, and how wide they spread is your honesty about the uncertainty.
Triangulating From Multiple Methods
The football field displays the ranges from the standard valuation methods side by side, letting the viewer see where they agree and disagree.
| Method | Produces a range from |
|---|---|
| Comparable companies | Peer multiples applied to the company |
| Precedent transactions | Multiples paid in past deals |
| Discounted cash flow | Forecast cash flows and discount rates |
| Others as relevant | Sum of the parts, LBO analysis, and so on |
Each method has strengths and weaknesses and rests on different assumptions, so each gives a different range. Rather than choosing one and ignoring the rest, the football field shows all of them, letting the analyst triangulate a reasonable value from where the methods converge, while seeing where they diverge and why.
Why the Overlap Matters
The most useful feature of the football field is the overlap between the ranges. Where several different methods, resting on different assumptions and data, all point to a similar value, that overlap is a reasonably robust estimate, since multiple independent approaches agree.
Where the methods diverge sharply, the overlap is small or absent, which is itself informative: it signals that the value is genuinely uncertain, or that the methods are capturing different things, and it warns against false confidence. A tight overlap suggests a value that can be relied on; a wide spread admits that the value is a matter of judgement and assumption, which is often the honest truth.
Why It Is Used in Deals
The football field is a staple of deal making, appearing in the presentations bankers make when advising on acquisitions, sales and fairness opinions. It is used because a deal requires justifying a price, and the football field shows that the proposed price falls within a defensible range supported by multiple methods.
When a banker advises that an offer is fair, the football field demonstrates that the price sits within the range the various methods produce, rather than resting on a single arguable figure. It provides a defensible, multi method basis for a valuation judgement, which matters when the judgement must withstand scrutiny from boards, shareholders and courts. The range, not a single number, is what makes the valuation defensible.
The Honesty in the Format
The football field embodies an important intellectual honesty about valuation. By showing ranges rather than a point, and multiple methods rather than one, it admits that valuation is uncertain and assumption dependent, resisting the false precision of a single number.
This honesty is a strength. A single valuation figure implies a confidence that does not exist and invites disputes over small differences that are within the margin of error. The football field frames the discussion correctly, around a reasonable range and the assumptions behind it, rather than around a spurious precise figure. It teaches that the right answer to what is this company worth is a range with reasoning, not a number, which is the mature understanding of what valuation can and cannot deliver.
The Bottom Line
The football field presents a valuation as a chart of ranges, one per method, stacked together, because no single method gives the true value and valuation is inherently uncertain. It lets an analyst triangulate from where the methods overlap, treating a tight overlap as a robust estimate and a wide spread as an honest admission of uncertainty. It is a staple of deal making because it provides a defensible, multi method basis for a price, and it embodies the honesty that valuation yields a reasonable range with reasoning, not a single precise number.