Valuing Pass-Through Entities

Chapter 1Introduction

In our daily lives we have come to expect—even demand—comfort, convenience, and choice. When we desire entertainment, we click on the remote and at our fingertips are hours of television viewing. When we want to speak with someone, we take out our portable telephone and dial the number, and we are instantly in conversation with someone who may be far away. We can change the climate in our home from hot to cold and back to hot simply by moving a dial. We can access encyclopedias with a few computer keystrokes. There is fast food, ethnic food, gluten-free food, carbohydrate-free food, fat-free food, and so on. Never before has so much been available so quickly to so many people.

Curiously, it seems like very few people—myself included—care how all of these things happen. I don't know what enables my car to do what it does. I don't know why my television, telephone, refrigerator, or any other household appliance works. Ask me why certain diets are better for me—I don't know and I don't care. It only matters to me that these things work when I want them to.

You may ask why any of this matters in a book about valuing pass-through entities. The reason is that if you are like the consumer who is described in the previous two paragraphs, looking for a quick and simple method to everything, including valuing any pass-through entity under any circumstance, then this book is not for you. This book does not offer a simple how-to valuation manual because there are no ...