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.
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Famous quotes containing the words suffering and/or company:
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—Walter Wellesley (Red)
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—Don Logan, U.S. businessman, president and chief executive of Time Inc. His response when asked how much his company had spent in the last year to develop Pathfinder, Time Inc.’S site on the World Wide Web. Quoted in New York Times, p. D7 (November 13, 1995)