The Dark Side of Valuation: Valuing Young, Distressed, and Complex Businesses, Second Edition

Conclusion

We will end this book how we began it—by noting that valuation has only a few first principles, and that the basic structure of valuation has not changed much over time. However, the kinds of firms we are called on to value pose more challenges today than ever before. As firms and investors globalize, companies have become more complex in terms of both their operations and the financing choices they make to fund those operations.

When called on to value companies, we should recognize that rigid rules do not serve us well, since valuing individual companies requires us to be flexible and devise new rules when faced with unusual scenarios. For every rule in valuation, there are a hundred exceptions. Rather than let estimation issues ...