On the Valuation of Small Businesses What is the impact of coronavirus on small businesses? What should valuation analysts consider in light of the stock market downfall when valuing a small business. The author shares his thoughts on the impact of coronavirus when valuing small businesses. The coronavirus pandemic is wrecking havoc on the global economy as we have seen last week with the stock market crash that compares to what we saw in 2008 during the financial crisis. Many businesses, big and small, have lost an incredible amount of money last week alone. And may still lose more in…
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The financial crisis of 2008 may have started in the U.S. banking sector but it went on to unleash the deepest global recession since the Great Depression. To read the full article in World Economic Forum, click: An Economist Explains What Happens if There is Another Financial Crisis.
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Legitimate customers and transactions are being hit hard by a system designed to stem the flow of dirty money. Many international banks have pulled in their horns since the global financial crisis, lending less and shedding customers. To read the full article in The Economist, click: The Unintended Effects of Rules Aimed at Stopping Financial Crimes.
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Some valuation practitioners use a normalized risk-free rate in determining the cost of capital. This can inflate the cost of equity by up to a couple of percentage points, which in turn depresses valuation multiples. Is normalizing the risk-free rate a rational, reasonable practice? In today’s guest post, Chris Mercer suggests the answer is an emphatic no. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Should Business Appraisers “Normalize” Long-Term Treasury Rates When Building Equity Discount Rates? This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the…
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The International Monetary Fund has warned that sluggish economic growth throughout the world could bolster an anti-trade backlash that has become a feature of politics in both the United States and Europe. “We have not done a great job in the advanced countries of paying attention to those who lose from trade,” said Maurice Obstfeld, the fund’s chief economist. To read the full article in The New York Times, click: I.M.F. Warns of Anti-Trade Sentiment Amid Weak Global Growth.
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Are We Heading Towards the Next Financial Crisis? (Part II of II) In this second part of the two-part article, the author, a valuation professional and trained economist, shares his thoughts on whether we are headed towards another financial crisis. Here, he shares his views on the size of the U.S. debt, low interest rates and whether the low interest environment is sustainable, and what he sees are solutions to the U.S. economic problems. (The views expressed in this article are solely those of the author; QuickRead invites its readers to respond or submit an article of their own on…
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Are We Heading Towards the Next Financial Crisis? (Part I of II) In this two-part article, the author, a valuation professional and trained economist, shares his thoughts on whether we are headed towards another financial crisis. (The views expressed in this article are solely those of the author, QuickRead invites its readers to respond or submit an article of their own on this important topic.)
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Since 2008, policymakers have kept interest rates at or near zero. All this cheap money was intended to heal the wounds of the financial crisis and encourage business owners to invest in and grow their businesses. Although this approach has helped a bit, business valuations tend to be running at higher than usual rates. AVC.com has reviewed recent data and determined whether this is a business valuation bubble forming and when it may burst. Of concern are non-linear asset value/earnings ratios that go against the norm. You can read the full article below. [button color=”blue” link=”http://avc.com/2014/03/the-bubble-question/” target=”_blank” font=”arial” align=”left”]Read Full…
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At Issue: Standard & Poor’s Ratings of Mortgage Bonds Before the Financial Crisis Jean Eaglesham, Jeannette Neumann, and Evan Perez report at the Wall Street Journal that S&P is under fire. Here’s more: