Among its familiar prescriptions for valuing stock in closely held companies, IRS Revenue Ruling 59-60 suggests that appraisers should carefully analyze “the economic outlook in general and the condition and outlook of the specific industry in particular.” Such an economic analysis is “critically important,” writes Rick Warner (Great Lakes Valuation) at the BVWire News blog, but he believes a micro focus is more important than a macro one.

The difference is one of emphasis as well as efficiency. Macro-economic trends regarding the housing market and the cost of energy are relevant to a degree and may translate into some impact on a company’s future income, “but most of the time the [economic] issues that are likely to impact the earnings of a company are much more ‘micro’ in origin,” Warner says.

So instead of spending too much time on reports from the Federal Reserve and general economic and business publications, “spend more of your analytical time on issues like supply and demand, elasticity of demand and pricing, uncertainty and risk,” he says. “That’s where we earn our fees, [and] the appraisals that you produce for your clients will be the better for it.”