Theory to Practice VPS StraightTalk Webinar, June 15, 2023 This article summarizes key takeaways from the June 15, 2023, VPS StraightTalk Webinar presentation co-led by R. James Alerding, CPA, ABV and Carli D. Lehr, CPA, CVA, CSEP. The speakers discussed how to differentiate between a projection and forecast, the importance of developing a reliable cash flow or projection evaluation of specific risk to the overall valuation, lessons from court cases regarding the use of forecasts, and what valuation standards say about the use of prospective financial information in business valuations. This article summarizes key points. Business valuation analysts spend a…
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Theory to Practice VPS StraightTalk Webinar, June 15, 2023 This article summarizes key takeaways from the June 15, 2023, VPS StraightTalk Webinar presentation co-led by R. James Alerding, CPA, ABV and Carli D. Lehr, CPA, CVA, CSEP. The speakers discussed how to differentiate between a projection and forecast, the importance of developing a reliable cash flow or projection evaluation of specific risk to the overall valuation, lessons from court cases regarding the use of forecasts, and what valuation standards say about the use of prospective financial information in business valuations. This article summarizes key points. Business valuation analysts spend a…
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Is it the Market or the Model? Petitioners in Delaware appraisal cases must necessarily argue that fair value exceeds the deal price. In contrast, financial economists tend to view prices from a well-functioning market as “true north” when valuing a stock. Valuation models—such as a discounted cash flow (DCF) model—+can be important tools but are known to be sensitive to their numerous inputs. When such a model results in a valuation that is at odds with market prices, it is imperative to understand the disconnect: Is it the market or the model that is wrong? In this Q&A, Analysis Group…