MEEM Client Relationships Valuation Model - CAC, Churn & Excess Earnings

Description
This Excel model helps valuation professionals, M&A advisors, finance teams, auditors and analysts estimate the value of customer or client relationships using a structured Multi-Period Excess Earnings Method (MEEM) approach. It is designed for situations such as purchase price allocation, intangible asset valuation, M&A support, impairment analysis, transaction advisory work and internal valuation reviews.


Users enter a 5-year P&L forecast, including revenues, costs and EBITDA, together with asset bases and required returns for the key contributory assets. The model then calculates Contributory Asset Charges (CAC) for land, buildings, equipment, other intangible assets and workforce. These CACs are deducted from the earnings attributable to the customer/client relationships in order to isolate the excess earnings generated by the asset being valued.


The model also applies churn assumptions to estimate the remaining economic benefit of the client relationships. If churn is low, the MEEM forecast can extend beyond the initial 5-year forecast period so that meaningful remaining cash flows are not artificially excluded. If churn is high, the model can cap the valuation period to reflect a faster decline of the client base.


The workbook includes a P&L forecast, CAC schedule, MEEM valuation, churn and discount-rate sensitivity table, model checks and a cover sheet. It is structured to be easy to review, audit and adapt.