What it means
Every valuation method gives a different answer, and each one produces a range rather than a single point. A football field chart lays those ranges side by side so a reader can see where they overlap and where one method is behaving as an outlier.
The usual bars are a discounted cash flow range, a trading comparables range, a precedent transactions range and, for a listed company, the share price range over the past year. Analysts sometimes add a range of published analyst price targets or the maximum price a debt-funded buyer could afford.
Its business value is that it forces an honest conversation about uncertainty. A board looking at one number tends to argue about that number, whereas a board looking at five overlapping bars argues instead about which method deserves the most weight.
Building one starts with the underlying models, because the chart itself is only a presentation layer. Each method produces a low and a high figure, those figures are converted onto a consistent basis such as equity value per share, and the bars are then drawn against a shared horizontal axis.
The nuance worth knowing is the concluded range, usually shown as a shaded band where the credible methods overlap. Any bar sitting entirely outside that band should be explained in a footnote rather than quietly dropped from the page.
In practice
Real-world examples.
Example
A private equity firm receives a bid for one of its portfolio companies and asks its adviser for a football field chart before responding. The chart shows the offer sits at the very bottom of every bar, which gives the firm the confidence to reject it and run a wider auction process.
Example
A family-owned distributor is preparing for sale and the owners each have a different number in mind. The chart shows a concluded range of $84,000,000 to $96,000,000, and seeing four independent methods land in the same place settles a disagreement that had run for months.
Example
An investment committee reviews a chart where the discounted cash flow bar sits far above every other method. The analyst is sent back to test the terminal growth assumption, and reducing it from 4% to 2.5% brings the bar back into line with the market evidence.
Think of it
“A football field chart lines up different valuations side by side-showing where methods agree or disagree.
Formula
Calculation
Equity Value = Enterprise Value - Net Debt
Value per Share = Equity Value / Diluted Shares Outstanding
Worked example: a manufacturer is valued using a discounted cash flow model that produces an enterprise value range of $200,000,000 to $260,000,000. Net debt is $40,000,000 and there are 10,000,000 diluted shares in issue.
Low equity value = $200,000,000 - $40,000,000 = $160,000,000.
High equity value = $260,000,000 - $40,000,000 = $220,000,000.
Low value per share = $160,000,000 / 10,000,000 = $16.00.
High value per share = $220,000,000 / 10,000,000 = $22.00.
The discounted cash flow bar is therefore drawn from $16.00 to $22.00. Suppose the trading comparables method gives $18.00 to $24.00 and precedent transactions give $19.00 to $26.00. The overlap of all three methods runs from $19.00 to $22.00, so that band becomes the concluded range presented to the board, and the seller now has a defensible reason to reject any offer below $19.00 a share.Case study
Seen in the real world.
Marbury Analytics is a fictional software business used purely as an illustrative example of how these charts are prepared and challenged. Its founders believed the company was worth $300,000,000 because a rival had reportedly sold at a similar figure.
The adviser built four bars. Discounted cash flow gave $180,000,000 to $230,000,000, trading comparables gave $170,000,000 to $210,000,000, precedent transactions gave $200,000,000 to $250,000,000, and a debt-funded buyer could afford at most $195,000,000. Only the precedent transaction bar came close to the founders' figure, and it did so because those deals had involved buyers paying for specific customer lists.
Seeing the four bars together changed the conversation from price to strategy. The founders spent eighteen months signing longer contracts with their largest customers, which lifted the recurring revenue base, and the same chart rebuilt later showed a concluded range starting above $250,000,000.
Watch out
Common mistakes.
- Treating the chart as a valuation in its own right. It is only a summary of models built elsewhere, and a badly built discounted cash flow produces a badly placed bar.
- Mixing enterprise values and equity values on the same axis. Every bar must be on one consistent basis, otherwise the overlap is meaningless.
- Widening the bars until they all overlap. Artificially wide ranges make the chart look tidy while telling the reader nothing useful about value.
Questions
People also ask.
Why is it called a football field chart?
Because the stacked horizontal bars against a numbered axis look like the yard lines on an American football pitch.
How many methods should it show?
Usually three to five, with each one genuinely relevant to the business, since adding weak methods dilutes rather than strengthens the picture.
Does the concluded range have to be the overlap of every bar?
Not necessarily, because an adviser may exclude a method that does not suit the business, but the exclusion should be stated openly on the page.
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