Which is Best: EV/EBITDA, EV/EBITA, or EV/EBIT? Adherence to Development and Reporting Standards in Family Law Litigation

When applied correctly, the Market Approach can link value to market evidence and help support a thorough and well-reasoned valuation.  However, valuation analysts often struggle with a variety of challenges when applying the Market Approach that include locating and selecting good comparable companies, selecting or calculating various valuation multiples from reported data, and weighting or selecting indications of value derived from various applied multiples.  Recently published research from Doron Nissim at the Columbia Business School at Columbia University NY may shed some light on the best measure of operating performance in the context of equity valuation and, thus, which measures may deserve more weight or consideration in deriving value.  All three enterprise value multiples (EBITDA, EBITA, and EBIT) perform reasonably well in explaining market valuations.  The superiority of EBITDA, however, in explaining equity valuations means this multiple should be given material consideration in any valuation using a relative valuation approach.

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The Business Exit Tsunami:
Delay at Your Peril

In this article, the author, a business broker, shares his views on how the coming retirement of business owners will impact business owners themselves and what business owners should consider when meeting with a prospective business broker.

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Unimpeachable Neutrality: How to Silence the Hired Gun

While evidentiary rules and ethical codes issued by professional bodies like the NACVA and AICPA prohibit accounting and valuation experts from taking an advocate position, the adversarial nature of the U.S. legal system creates a market which at times demands a “hired gun” expert witness who caters their opinion of damages or business value to that which most convincingly favors the side that hires them. This article discusses an expert’s conceptual quest for unimpeachable neutrality and provides guidance on how to silence the hired gun, maintain one’s integrity, all while staying gainfully employed.

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Transfer Pricing Business Models: Aligning Business Models and Business Practices

A key factor in establishing a reasonable transfer price is establishing the business model used by sales and distribution organizations. In this article, the authors describe the three primary models and their relevance establishing and defending a transfer price.

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