For most of us, 2020 has been one of the most challenging years of our lives. The pandemic has affected business performance both negatively and positively, temporarily and structurally. It will permanently reshape the global economy in several ways, most of which we are just beginning to understand.
Change and uncertainty makes the job of valuing and appraising businesses and business assets more challenging. At the core of every business valuation analysis is the process of normalizing or recasting the financial statements of the subject company from an historical accounting basis to a proforma economic basis. If you get this wrong, the value conclusion will be wrong.
Exit Strategies recently developed a checklist of nonoperating and nonrecurring revenue, COGS, expense, assets and liabilities that should be considered for valuations performed during the COVID-19 era. Developed by our team of seasoned valuation analysts and M&A advisors, this checklist provides a framework for private investors, business owners, financial executives and other business valuation professionals to use.
Download the COVID-Era Normalization Adjustments Checklist now. And check back for updates. This checklist is a work in process as the effects of the pandemic on the economics and financial statements of businesses continue to unfold and evolve.
The Exit Strategies Team