Not long ago, business appraisers would have relied on studies with limited transactions that only presented a single data point. Today, we have available hundreds of transactions, each with multiple data points. Rather than merely accepting a study author’s results, today’s business appraisers need to develop conclusions by independently analyzing the data. Interpreting this information, however, can require sophisticated statistical applications.
Many business appraisers still rely on simple averages or medians (the middle value) in order to interpret the data. However with such a large number of data points, these may not necessarily achieve the proper conclusion. Instead, the use of advanced statistical analysis can be required, a skill in which business appraisers may not be trained.
Has your current appraiser received training in probability and statistics?
Business appraisal reports will usual only apply a single scenario on what might be a “most likely” outcome for a particular business. For our operating company valuations, we consider multiple scenarios—generally in the thousands per appraisal. This enables us to look at the company over a variety of economic events and circumstances. Considering multiple scenarios allows us to obtain expected outcomes, which meet professional standards better than the “most likely” outcomes of ordinary business appraisals. We like to consider that the “most likely” outcome may only give the reader a “snapshot” of the business, whereas Greene Valuation will provide the reader the equivalent of a full-length motion picture. It is exciting to observe how changing assumptions can impact the value of the entity. It’s this difference that has turned other leading appraisers, CPAs and attorneys to sources of repeat referrals.
Greene Valuation operates like a profession rather than a business.
We do not answer to outside investors, such as other publicly traded valuation firms; we are not subject to the pricing pressures of other partners; and we do not force out “cookie-cutter” reports to maintain profit margins.
At Greene Valuation, we strive to achieve perfection on every assignment. This means avoiding subjectively applied estimates and implementing empirical data and technical expertise. We are trained to apply mathematical formulas such as regression analysis, Monte Carlo simulation, and option modeling rather than just using rule of thumb, ad hoc estimates.
The risks of applying an ad hoc estimate is that it often intuitively invokes a counter proposal at the opposite end of the spectrum equally supported by an uncorroborated supposition. With Greene Valuation, accurate and sound theory is met with acceptance and endorsement. On most of our valuations, we apply multiply models and approaches to substantiate our conclusions. This has won us favor with mediators and other experts.
We are frequently asked by business appraisal competitors and CPA firm valuation departments to provide models for use in their reports. We consider this the highest level of compliment and accolades when competitors reach out for our services and expertise.
Not all business appraisals are the same. At Greene Valuation, you get more without paying more.
