The Effect of COVID-19 on Valuations

It is no surprise that the COVID-19 pandemic has created tremendous uncertainty regarding the current value of businesses.  Earlier this year, our country witnessed major stock indexes lose more than 20 percent of their value, the World Health Organization declare a worldwide pandemic, and the President of the United States declare a national emergency.  In the months that have followed, our economy and business community have weathered extremely tumultuous times.  All these factors would make any business owner question the value of a business.  

It is important that business valuations account for known or knowable circumstance, as of the date of your valuation, that could affect its value.  Whether you are a business owner in the process of estate and gift planning, considering a sale or a merger, going through a divorce, or an investor, the global pandemic is most likely going to have a significant impact on your business’ future. 

Important considerations during this time include: 

  • Has your company received any stimulus? 
  • What was the impact on cash flow and will it continue?  Are there any additional risks? 
  • Have you had to decrease your workforce?  Will you be rebuilding your workforce? 
  • Are you confident in your management team and are strong plans in place?
  • Is your company experiencing a material change in the way it does business due to COVID?

Having a knowledgeable expert when it comes to these sensitive topics is crucial.  Let Crosslin consult with you how these events may impact your business or investment values and be a critical part of your advisory team.

Please contact a member of the Crosslin Forensic Valuation Service Team by e-mailing here or calling (615) 320-5500 with any questions you may have.  As always, we appreciate your business and are always here to help!