Vertical IQ enhances its industry research platform
Eleven U.S. industry sector profiles have been added to the Vertical IQ industry research platform, including: accommodation and food services; agriculture, forestry, and fishing; educational services; information sector; real estate; and transportation and warehousing.
Valuation impacts of the Inflation Reduction Act
Expect to see increased scrutiny on business valuations for tax purposes as a result of the Inflation Reduction Act of 2022 (IRA).
Recession tops Kroll’s 10 trends to watch in 2023
The new year “promises to be a tougher ride for most businesses, investors and consumers globally, but there is always opportunity in volatility,” according to the Kroll Institute in its latest report, “10 Trends to Watch Heading Into 2023.”
Takeaways from the final big BV event of 2022
The beach or the ski slope? Those were the options for attendees who ventured out to either Park City, Utah, or Fort Lauderdale, Fla., for the NACVA Business Valuation & Financial Litigation Super Conference last week.
Growth rates for software firms underestimated, says research paper
Both management and market analysts “systematically underestimate the annual growth rates of software companies,” according to researchers who examined these types of firms.
Restaurants and inflation: what’s the breaking point?
Restaurants have been raising prices more aggressively in recent months to offset rising food and labor costs, according to an update from the Vertical IQ industry research platform.
Global BV News: Industry multiples down in Europe
EV/EBITDA multiples have generally decreased in Europe over the third quarter of 2022, according to the fourth edition of Kroll’s “Industry Multiples in Europe” quarterly report.
GDP up in 3Q22, reports BVR’s EOU
The U.S. economy—as indicated by gross domestic product—increased at an annual rate of 2.6% in the third quarter of 2022 after declining at a rate of 0.6% in the second quarter, according to the latest quarterly issue of Economic Outlook Update (EOU), published by Business Valuation Resources (BVR).
Huge turnout for the AICPA FVS conference
At 800 attendees, the AICPA & CIMA Forensic and Valuation Services Conference in Las Vegas was the largest event we’ve been to this year.
Embracing the Hockey Stick: Alternative Approaches to Formulating and Assessing Projections
The question of projections may be one of the most challenging elements of a business or intellectual property appraisal. Most business appraisers will be placed in a position of assessing projections, including projections another appraiser provided. Join Michael Blake for an exploration of the quantitative and empirical methodologies for creating and/or validating projections. As a result of this class, you will gain exposure to potentially new tools to help make your projections more robust and ...
Valuation Considerations in High Inflationary Environments
With inflation at its highest level since the Great Inflation, valuation analysts will have to consider macroeconomic factors that have not been present in the U.S. economy in over 20 years.
Accounting for Inflation in the Income Statement Forecast
An example from an actual engagement that demonstrates the manner in which inflation can impact a valuation.
Key Industry Updates for Various Types of Stores and Retailers
The economy, high inflation, the Russia-Ukraine war, and the pandemic continue to impact firms in all industries, so it’s important for valuation analysts to keep up with these developments. Here are some recent and very targeted updates for various retail stores from the Vertical IQ industry research platform.
Delaware Chancery Court Cites Differences in Cash-Flow Assumptions as Cause for Large Discrepancy in Value
In this appraisal action to determine fair value, petitioner Ramcell Inc. exercised its appraisal rights in asking for a statutory appraisal of the value of its 155 shares of Jackson Cellular Telephone Co. Inc. The respondent, Alltel Corp. (dba Verizon Wireless), had converted the 155 shares at a value of $2,963 per share. “Respondent’s expert opines that Jackson’s per-share value was $5,690.92 at the time of the merger. Petitioner’s expert has offered two appraisal ranges, opining that, at the high end, Jackson’s per-share value was $36,016 on the merger date.” Both parties agreed that the DCF method should be the sole method for determining the value. The Delaware Chancery Court, using that method, determined the fair value of each share at $11,464.57. The court noted that the disparity in the parties’ valuations was due to disagreements as to the inputs to the DCF model and how they should be calculated.
Ramcell, Inc. v. Alltel Corp.
In this appraisal action to determine fair value, petitioner Ramcell Inc. exercised its appraisal rights in asking for a statutory appraisal of the value of its 155 shares of Jackson Cellular Telephone Co. Inc. The respondent, Alltel Corp. (dba Verizon Wireless), had converted the 155 shares at a value of $2,963 per share. “Respondent’s expert opines that Jackson’s per-share value was $5,690.92 at the time of the merger. Petitioner’s expert has offered two appraisal ranges, opining that, at the high end, Jackson’s per-share value was $36,016 on the merger date.” Both parties agreed that the DCF method should be the sole method for determining the value. The Delaware Chancery Court, using that method, determined the fair value of each share at $11,464.57. The court noted that the disparity in the parties’ valuations was due to disagreements as to the inputs to the DCF model and how they should be calculated.
How long will high inflation last?
The U.S. economy will be returning to a more normal level of inflation by late 2023 and heading into 2024, according to published research presented during a recent BVR webinar conducted by William Harris (Trugman Valuations).
Dealing with stubborn inflation in your valuations
With the CPI numbers coming in higher than expected, valuation experts will continue to grapple with how to assess the impact of inflation on their subject companies.
Hitchner v. Damodaran on Inputs to the Cost of Capital
Jim Hitchner (Valuation Products and Services) responds to some severe criticisms Aswath Damodaran (New York University Stern School of Business) made during a BVR webinar about certain inputs to the cost of capital. Hitchner also offers some best practices and a handy tool to use as a reasonableness check on your cost of capital estimate.
BV News and Trends September 2022
A monthly roundup of key developments of interest to business valuation experts.
Take a fresh look at your long-term growth rate, says Grabowski
Do you estimate a long-term growth rate by taking long-term real GDP growth plus expected inflation? If you do, you may want to reconsider, according to recent research by Roger Grabowski (Kroll) and Ashok Abbott (West Virginia University).
On-the-ground report from the ASA International Conference
Appraisers from all disciplines met in Tampa, Fla., and online for the ASA 2022 International Conference September 10-12.
Damodaran on How Inflation Plays Out in Company Valuations
Professor Aswath Damodaran (New York University Stern School of Business) presents a simple framework for assessing the impacts of inflation on the value of a private company. He also made some explosive remarks about certain inputs to the cost of capital.
BV News and Trends August 2022
A monthly roundup of key developments of interest to business valuation experts.
The 2022 Cannabis Reset: A Redux of 2019?
Comments on the impacts to the cannabis industry in the wake of COVID-19 and related economic stimuli and amid inflation, interest rate increases, legislative reforms, and labor and supply-chain disruptions.
BV News and Trends July 2022
A monthly roundup of key developments of interest to business valuation experts.