Laura Pfeiffenberger (Fannon Valuation Group) says, “rather than consider management interviews and historical growth rates in a proverbial ‘judgment’ vacuum, Manpower, Inc.’s expert should have reinforced the argument for the selected growth rate by considering the company’s historical performance and forecasts available in the context of industry and economic outlooks available at the time of the damages period. This information is readily accessible from a number of sources widely used and commonly accepted by forensic accountants and finance and valuation professionals. However, experts should be cautioned that their selected industry and economic data may be vigorously challenged and thus, to survive a Daubert motion, they should be familiar with how the selected data was derived. In some instances, it may be appropriate for an expert to use such data in a yardstick method to show a guideline company’s performance or growth as a proxy for the damaged company’s affected revenues and profits.”
Economic damages experts commonly use both options in lost profit cases, as discussed in more detail in BVR’s The Comprehensive Guide to Lost Profits Damages for Experts and Attorneys.