Elements to Avoid When Valuating a Business

When valuating a business, it's important to understand the common mistakes that can be made. At VR, we perform a business valuation that is not only comprehensive but avoids relying on certain elements such as the following.
Unrealistic Cash Flow Projections  
The most common mistake typically made in valuation is unrealistic cash flow projections vs. the discount rate being used in the discounted future cash flow analysis. Aggressive growth projections, when not well supported by good market research and analysis of the company being valued, carry high risk factors with them. This should prompt an increase in the discount rate (required rate return) used….

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