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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The Dark Side of Valuation
Analysts who value declining and distressed firms often find that the tools and approaches that served them adequately with healthy companies fail them. This problem is worse when a sector with a history of financial health becomes troubled, since analysts are slow to let go of old rules of thumb and metrics. This section considers some of the resulting problems in valuing declining and distressed companies.
Autopilot Optimism
At the start of this chapter, we argued that one of the biggest problems that analysts face in valuing declining companies is that they have to fight the optimism that is inherent in valuation. This optimism manifests itself in the valuation of distressed companies in three places:
Growth rates: ...
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I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.