In her NY Daily Record article “Keeping Your Balance: Forecasting in business valuations,” Kristin S. Coffey (Mengel, Metzger, Barr & Co) wrote there are many warning signs of unreliable projections provided by management that BV professionals should look for, some of which include:
- Forecast results are significantly different than past results
- Forecast was prepared by the CEO/CFO without input from other areas of the business
- The terminal value makes up a significant portion of the resulting value and/or the resulting value is not consistent with the values from other valuation methodologies used
- Forecast that is not achievable without additional financing
There is perhaps no set of data more universally useful to valuation analysts than management projections and forecasts. Regardless of the purpose or target or appraisal, projections and forecasts can provide invaluable insights. Join Christine Baker (ParenteBeard) on May 5th for BVR’s “Advanced Workshop on Management Projections & Forecasts.” Using hands on examples and case-studies in this interactive web-workshop, Baker will show what every analyst should know when working with projections, regardless of their state of completion or the valuation assignment. CPE and CLE credits are available.
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