Valuation of A Suffering Company
Additional adjustments to a valuation approach, whether it is market-, income- or asset-based, may be necessary in some instances. These involve:
- excess or restricted cash
- other non-operating assets and liabilities
- lack of marketability discount of shares
- control premium or lack of control discount
- above or below market leases
- excess salaries in the case of private companies.
There are other adjustments to the financial statements that have to be made when valuing a distressed company. Andrew Miller identifies typical adjustments used to recast the financial statements that include:
- working capital adjustment
- deferred capital expenditures
- cost of goods sold adjustment
- non-recurring professional fees and costs
- certain non-operating income/expense items.
Read more about this topic: Valuation (finance)
Famous quotes containing the words suffering and/or company:
“We live in an age when to be young and to be indifferent can be no longer synonymous. We must prepare for the coming hour. The claims of the Future are represented by suffering millions; and the Youth of a Nation are the trustees of Posterity.”
—Benjamin Disraeli (1804–1881)
“Yet, hermit and stoic as he was, he was really fond of sympathy, and threw himself heartily and childlike into the company of young people whom he loved, and whom he delighted to entertain, as he only could, with the varied and endless anecdotes of his experiences by field and river: and he was always ready to lead a huckleberry-party or a search for chestnuts and grapes.”
—Ralph Waldo Emerson (1803–1882)