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:
“Evil is neither suffering nor sin; it is both at the same time, it is something common to them both. For they are linked together; sin makes us suffer and suffering makes us evil, and this indissoluble complex of suffering and sin is the evil in which we are submerged against our will, and to our horror.”
—Simone Weil (1909–1943)
“In the old days, one married a wife; now one forms a company with a female partner, or moves in to live with a friend. And then one seduces the partner, or defiles the friend.”
—J. August Strindberg (1849–1912)