“So Tim, what is a beer distributorship worth these days?”
For me, this is a recurring question; and I’m sure it’s a recurring question for others who determine the value of beer distributorships.
“It depends,” is the short and somewhat vague response I’ve provided in the past. Making that particular statement is not an attempt to be coy, unresponsive, or irksome. The “it depends” answer is provided because professional standards prohibit analysis-free valuations and, more importantly, because the “right” answer is, “It’s all relative.”
Continue reading Valuation, It’s All Relative
This quarter’s “Valuation Tales” includes four licensed excerpts provided by Business Valuation Resources (BVR).
- In S. Muoio & Co., LLC v. Hallmark Entertainment Investments, the Delaware Chancery Court stresses the use of multiple methods. The case supports the principle that multiple methods should be used, including cost, income (e.g., DCF), and market (i.e., multiples).
- A review of several cases involving Lost Profits Damages and Lessons Learned from Daubert, including discussion of comparable cohorts, yardsticks, and other valuation techniques. These cases illustrate how contracts, statutes, and other factors can dictate damages.
- Hendrix v. Commissioner details a tax court’s decision to uphold a defined value clause. This is the type of case that might provide food for thought if you are working on a buy-sell agreement or shareholders’ agreement.
- The Estate of Cohen v. Booth Computers asks the question, “Is a Buy-Sell at Book Value Unconscionable, When FMV is 60 Times Greater?” This case offers an out-of-proportion lesson on how not to integrate accounting, valuation, and a buyout provision.
Continue reading Valuation Tales: 2011 – Q3
I can’t pick a single word for 2011’s third quarter (Q3), but my selections include weak, volatile, and unsettling. Those possessing favorable dispositions towards incantations, however, appear to have settled on “mixed.” My warped perception is that retaining a positive disposition presently requires the diligent selection of four-week bright spots as contrasts to long-term bleakness—and little else. So here’s how that’s done.
Continue reading M4 – Malted Minds Macro Minute: 2011 – Q3
8 Ways to Sell Against a Lower Price
A Nice Tactical Review with Price Increases Now Upon Us
“There are eight basic ways to defend against a lower price. Master them all, and you’ll spend a lot less time negotiating and a lot more time closing deals. These eight, great differentiators are the keys to defending a high price against lower priced competitors,” writes Geoffrey James on BNET.
Millennials Want Mentors More Than Money
Yet Another Take on How Motivate Millennials
“If You Want to Retain the Best Young Workers, Give Them a Mentor Instead of Cash Bonuses. ‘With Generation Y coming into the business, hierarchies have to disappear. Generation Y expects to work in communities of mutual interest and passion—not structured hierarchies.’”
Top 10 Black Swan Predictions for 2011
Midway Through at Least One Has Come True
“Saxo Bank has released its 10 outrageous predictions for 2011 and they include some notable tail-risk possibilities.
As FT Alphaville points out, Saxo’s list got 3 out of 10 correct in 2010. Not a bad haul for a list meant to find the sort of Black Swans Nassim Taleb writes about.”
(Post your own guesses and black swan predictions on the DMGF website.)
Continue reading Random Links For Financial Kinks: 2011 – Q3
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