July 2009
Intermediate to advanced
600 pages
19h 50m
English
book
The Dark Side of Valuation: Valuing Young, Distressed, and Complex Businesses, Second Edition
by Aswath Damodaran
Content preview from The Dark Side of Valuation: Valuing Young, Distressed, and Complex Businesses, Second Edition
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Conclusion
In general, it is easier to value mature companies than high-growth companies, because we have more relevant historical data on earnings, cash flows, and revenues. That does not mean, however, that mature companies pose no challenges. This chapter looked at two aspects of mature companies that may create problems in valuations. We considered the shift that some mature firms make to acquisitions to jump-start growth, and the possibility that a change in management could create a change in value.
Valuing acquisitive companies requires us to deal with two estimation issues. The first is the lumpiness of acquisitions, where a big acquisition in one year is followed by inactivity in the other. The second is the accounting treatment of ...
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