When Guideline Companies are Not Very Good? When given a choice, do you prefer to minimize errors of commission or omission? The answer will likely influence your view as to whether the market approach should be used when valuing a company with guideline companies that are not very good. Someone who seeks to minimize errors of commission will likely exclude the market approach due to the difficulties in executing the analysis. Conversely, someone who seeks to minimize errors of omission will likely include the market approach due to the insight it can provide as a ‘sanity check’ to the other…
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COVID-19 and Business Valuation—One Year Later: What Worked and What Didn’t On March 2, 2021, Jim Hitchner, Managing Member of Valuation Products and Services (VPS), made a follow-up presentation, COVID-19 and Business Valuation—One Year Later: What Worked and What Didn’t. This article summarizes the issues discussed during this follow-up webinar. A year has passed since the COVID-19 pandemic first impacted businesses. Business valuation (BV) practitioners preparing COVID-19 reports have grappled with how to incorporate the impact of this pandemic on the various industries and valuation reports. In this webinar, COVID-19 and Business Valuation—One Year Later: What Worked and What Didn’t,…
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A Discussion of Rover Pipeline, LLC v. 10.55 Acres of Land, More or Less, in Ashland County, Ohio, et al. “In God we trust. All others must bring data.” This famous saying has been attributed to various people, but it implies that when data is presented, the conclusion can be trusted. However, the Ohio District Court’s decision in Rover Pipeline, LLC v. 10.55 Acres of Land, More or Less, in Ashland County, Ohio, et al., demonstrates that data is only trustworthy if it is understood and applied correctly. The case, in which the expert’s valuation report was discarded due in…
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While valuation may generally be part art and part science, rebutting and/or defending a valuation introduces additional types of art and science. The stakes are often higher because interested parties are affected by the contested valuation’s outcome, and the narrative can become more nuanced due to conflicting views on a variety of issues. This article endeavors to cut through the clutter and provide practical tips to address some common themes that arise in rebutting and/or defending a valuation report in a contested situation.
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Can private companies really increase their value 80-100 percent by limiting unsystematic (controllable) risks? The November/December 2013 issue of The Value Examiner featured Ken Sanginario’s article entitled, “The Valuation Business: A Strategic Road Map for Success.” In this article, Sanginario answers questions raised by skeptics to make the case that value doubling for private companies is possible.