Quantitative Business Valuation: A Mathematical Approach for Today's Professionals
Essential reading for the serious business appraiser,Quantitative Business Valuation, Second Editionis the definitive guide to quantitative measurements in the valuation process. No other book written on business valuation is as well researched, innovative, and bottom-line beneficial to you as a practitioner.Written by leading valuation and litigation economist Jay B. Abrams, this text is a rigorous and eye-opening treatment filled with applications for a wide variety of scenarios in the valuation of your privately held business.Substantially revised for greater clarity and logical flow, theSecond Editionincludes new coverage of:Converting forecast net income to forecast cash flowDamages in manufacturing firmsRegressing scaled y-variables as a way to control for heteroscedasticityMathematical derivation of the Price-to-Sales (PS) ratioMonte Carlo Simulation (MCS) and Real Options (RO) AnalysisVenture capital and angel investor rates of returnLost inventory and lost profits damage formulas in litigationOrganized into seven sections, the first three parts of this book follow the chronological sequence of performing a discounted cash flow. The fourth part puts it all together, covering empirical testing of Abrams' valuation theory and measuring valuation uncertainty and error. Parts five to seven round it all out with discussion of litigation, valuing ESOPs and partnership buyouts, and probabilistic methods including valuing start-ups.The resulting work, solidly grounded in economic theory and including all necessary mathematics, integrates existing science into the valuation profession&#8212;and develops valuation formulas and models that you will find useful on a daily basis.