Blast from the past on forecasting
During a recent BVR webinar, Josh Shilts (Shilts CPA PLLC) mentioned a helpful article that appeared in the Harvard Business Review (HBR), “How to Choose the Right Forecasting Technique.”
Today! ‘Integrated Theory’ authors kick off webinar series
A very special BVR webinar series begins today with the authors of Business Valuation: An Integrated Theory, Z. Christopher Mercer and Travis W. Harms (both with Mercer Capital).
Despite COVID-19 and Brexit, the UK minted six new unicorns in 2020
CBInsights has updated its 2020 summary, showing that 76 private startups achieved unicorn status (a unicorn is a private company that has a valuation of more than $1 billion) last year, including six from the UK.
A free model for business valuers to quantify operating value for businesses with real property holdings
Comparability can be a difficult standard when valuing businesses with significant real estate assets used as part of their operating company assets.
Adjusting the Income Approach Highlights AICPA FVS Conference Panel
A panel at the AICPA FVS Conference fielded a barrage of audience questions about how to help make sure the income approach captures the impacts of the current environment. The panel, moderated by Jim Hitchner (Financial Valuation Advisors), included Lisa Cribben (Wipfli LLP), Harold Martin (Keiter), and Mark Zyla (Zyla Valuation Advisors LLC).
Book review: The Art of Business Valuation: Accurately Valuing a Small Business
The current issue of NACVA’s QuickRead includes a favorable review of a recently published book, The Art of Business Valuation: Accurately Valuing a Small Business.
Power Panel: Live Expert Answers for Today’s Tough BV Questions
What is in store for 2021? While we don’t have a crystal ball, we do have the next best thing. Thought leaders Jay Fishman, Jeff Tarbell, Michelle Gallagher, and Ken Pia are on hand to answer your questions on what is changing, trends within the profession, and thought processes behind tackling tough problems. What’s more, if you send in a video of yourself asking the question, you will get free admission to the session. Use ...
New guidance issued on the Payroll Protection Plan
During a recent BVR webinar, speakers report that many business owners will claim their Payroll Protection Plan (PPP) loans will be 100% forgiven.
Providing a Framework for Testing the Reasonableness of Terminal Period Cash Flow Investments
Whether using the traditional Gordon Growth formula or the value driver formula, it is common for a valuer to neglect testing the reasonableness of the capitalized free cash flow used in determining the terminal value and, therefore, derive a terminal value that is incorrect. This is troubling considering how important the terminal value is when concluding an equity value; the terminal value most often accounts for a majority of the concluded enterprise value when applying ...
The Size Effect: Should We Care?
I read the entire edition of Business Valuation Review (Volume 37, Issue 3, Fall 2018) focused on ‘‘the size effect.’’ I have the following ‘‘big picture’’ comments after considering all four articles together and title my letter: The Size Effect: Should We Care?
Total Beta—Where Does It Fit in Valuation Theory
The valuation of any company by the discounted cash flow method is divided into two different tasks: forecasting cash flows and discounting these same cash flows using the appropriate discount rate. The latter requires a good understanding of the risks faced by the subject company's cash flows to be able to determine the appropriate risk premia to compensate a typical willing buyer and satisfy a typical willing seller. There is a high level of ambiguity ...
Intellectual Property Valuation Case Law Compendium, Fourth Edition
January 2021 Hardcover, PDF (580 pages)
BVR (editor)
Business Valuation Resources, LLC
Little-Known Resource Can Help Bolster Support for Projections
Projections used in business valuation have always been subject to scrutiny—and now more than ever. During the recent ASA International Conference, it was pointed out that many valuation analysts may not know of a resource that can be used to help support their assessment of projections.
Can You Do Two Valuations With the Same Date? Yes, Says Hitchner
A valuation done pre-COVID-19 may be obsolete, so can you update it using the same valuation date and factor in the impacts of the pandemic? Yes, says James Hitchner (Valuation Products and Services), and he believes doing so is not in conflict with the valuation standards.
Interesting poll results in latest Hitchner pub
The latest issue of Hardball With Hitchner includes the results of some recent polls that reveal what valuation practitioners are doing to reflect the impact of COVID-19 in valuations.
Assume every valuation will be challenged
“As appraisers, our reputation is our single most valuable asset ...
DealStats 3Q20 small private-company EBITDA multiples rise
After stalled M&A, lockdowns, and a pandemic, it’s easy to forget that small enterprise value was declining through most of 2019.
Company or Damage Valuation in a Mediation Context
The number of online mediations has soared due to the pandemic. This article outlines the standard phases of a valuator-assisted mediation and the concept of the best alternative to a negotiated agreement (BATNA) and includes some real-world case studies.
Prospects grow for valuing promissory notes, says Mercer
There is an increasing number of opportunities for analysts in valuing promissory notes, says Chris Mercer (Mercer Capital) during the recent AICPA Forensic & Valuation Services Conference.
Hitchner debuts monthly Hardball publication
James Hitchner (Valuation Products and Services) has released the first issue of Hardball With Hitchner.
The Valuation of Convertible Notes Using a Binomial Model
The authors’ research reveals that there are numerous articles, chapters, and models with bad math, bad equations, notational errors, or undisclosed rounding in some equations. They present a version of the Goldman Sachs binomial model and suggest that valuators provide fully functional binomial models when requested so that reviewers can “look under the valuator’s hood.”
Mercer and Harms release new edition of their Integrated Theory book
BVR is pleased to announce that the new third edition of Business Valuation: An Integrated Theory is now available in its bookstore.
Business Valuation: An Integrated Theory, 3rd Edition
October 2020 Hardcover
Chris Mercer, Travis Harms
John Wiley & Sons, Inc.
The revised and updated third edition of Business Valuation: An Integrated Theory explores the core concepts of the integrated theory of business valuation and adapts the theory to reflect how the market for private business actually works. In their book, the authors—two experts on the topic of business valuation—help readers translate valuation theory into everyday valuation practice.
Learn more >>
Some further thoughts on ‘most likely outcome’ forecasts for business valuation
Every financial analyst is struggling with forecasting methodologies now.
Amid Market Data Volatility, the Best Option Is a More Rigorous DCF
A panel of global valuation experts who conducted a recent webinar co-sponsored by RICS, and also NACVA, the ASA, GACVA, and CBVI gives their comments.