In his very first deposition, veteran valuation expert Jim Hitchner (Financial Valuation Advisors) learned two valuable lessons. First, know what economic data you are putting into your reports, and, second, take out economic information that you do not use. In the March issue of Hardball With Hitchner, he recounts that the first questions in the deposition targeted the economic section of his valuation report, which included the term “chained growth rates.” The attorney asked him what that meant, but Hitchner had no idea. “Not having a grasp of the underlying data that appears in your report can be a litigation risk for experts,” he writes. This is especially true during the pandemic, which has increased the importance of economic data underlying a valuation.

The rest of the issue gives a practical look at how to understand and use economic data, particularly with regard to gross domestic product (GDP), which is “one of the most important economic indicators used in business valuation,” he writes. Hardball With Hitchner is a monthly publication. For subscription information, click here.