11 Aug When to Use Industry-Specific Valuation Multiples for Business Valuation
Here are some instances when using Industry Valuation Multiples for valuing your company are appropriate
- There is an adequate number of comparative companies and/ex transactions to determine a value multiple.
- If comparative public companies will be used, there is adequate data on the comparatives to allow the consultant to make appropriate analyses and adjustment.
- If comparative transactions will be used, there is adequate data (e.g., terms of sales, asset sale vs. stock sale) on the comparatives to allow the consultant to make appropriate analyses and adjustments.
- The valuation is lex Federal income tax purposes (estate and gilt taxes, charitable contributions, ESOPs, etc.).
- The company being valued is considering going public.
NOTE: Generally, consultants should perform a search for comparative company data on each engagement.