Valuing Businesses Using Regression Analysis - A Quantitative Approach to the Guideline Company Transaction Method

Demystifies regression-based valuation through simple explanations, easy-to-understand charts, and time-saving bonus resources
 
Current methodologies using median, quartiles, or standard deviations to calculate revenue multipliers and cash flow multipliers often produce values that are wildly divergent. This forces the appraiser to choose between a very high or a very low value or consider averaging the values, opening the possibility for the appraiser to be challenged. On the surface, regression analysis appears to be the more complex, mathematical model, so many professionals shy away from using it out of fear that readers will be confused and reject the results of the appraisal. Valuing Businesses Using Regression Analysis solves this issue by breaking down regression to its simplest terms and providing easy-to-read charts and explanations that can be understood by all.
 
Since regression analysis does not come pre-installed in Excel, this book will show you how to enable Excel's regression in your computer. Then you'll learn four different Regression tools that can be used for business valuations or for forecasting in general. As an added perk, this book also comes with a template that simplifies the entire regression methodology into the click of one button. With a minimal amount of work, you can use this template to produce a compelling four-page valuation report.
* See why current valuation methodologies can be wildly inaccurate and why regression analysis is a practical and preferable alternative
* Learn how to set up Regression in Excel and use single-variable linear regression to predict revenue and cash flow multipliers
* Walk through the process for conducting more advanced analyses, including curved regression with outliers and multiple variable regression
* Use the bonus template to create attractive four-page valuation reports using regression analysis in Excel
 
This book is an excellent choice for valuators and other financial professionals ready to take the leap into regression analysis for more accurate, more objective business valuations.

List of contents

Foreword
 
Preface i
 
CHAPTER 1: Current Methodologies 1
 
CHAPTER 2: The Solution 15
 
CHAPTER 3: Identifying Outliers Using Re-gression 26
 
CHAPTER 4: Cash Flow Multiplier Regression 31
 
CHAPTER 5: Enterprise Multiplier 41
 
CHAPTER 6: Polynomial Regressions 45
 
CHAPTER 7: Multiple Variable Regression 50
 
CHAPTER 8: Selection of Transactions in the Sample 62
 
CHAPTER 9: Regression 2.0 92
 
CHAPTER 10: Using Excel's Regression Utility 107
 
CHAPTER 11: Excel Valuation Template 125
 
CHAPTER 12: Conclusion
 
Acknowledgments 142

About the author

FRED HALL is CEO and owner of Amador Appraisals and Acquisitions. He has eighteen years of experience in writing business valuations and has appraised over 800 companies. He is a sought-after lecturer and speaker on business valuation techniques at national conferences. His research has been published in IBA's quarterly journal, Business Appraisal Practice, Business Valuation Resource's quarterly, Thomson-Reuter's Valuation Strategies, NACVA's The Value Examiner, and others.

Summary

Demystifies regression-based valuation through simple explanations, easy-to-understand charts, and time-saving bonus resources

Current methodologies using median, quartiles, or standard deviations to calculate revenue multipliers and cash flow multipliers often produce values that are wildly divergent. This forces the appraiser to choose between a very high or a very low value or consider averaging the values, opening the possibility for the appraiser to be challenged. On the surface, regression analysis appears to be the more complex, mathematical model, so many professionals shy away from using it out of fear that readers will be confused and reject the results of the appraisal. Valuing Businesses Using Regression Analysis solves this issue by breaking down regression to its simplest terms and providing easy-to-read charts and explanations that can be understood by all.

Since regression analysis does not come pre-installed in Excel, this book will show you how to enable Excel's regression in your computer. Then you'll learn four different Regression tools that can be used for business valuations or for forecasting in general. As an added perk, this book also comes with a template that simplifies the entire regression methodology into the click of one button. With a minimal amount of work, you can use this template to produce a compelling four-page valuation report.
* See why current valuation methodologies can be wildly inaccurate and why regression analysis is a practical and preferable alternative
* Learn how to set up Regression in Excel and use single-variable linear regression to predict revenue and cash flow multipliers
* Walk through the process for conducting more advanced analyses, including curved regression with outliers and multiple variable regression
* Use the bonus template to create attractive four-page valuation reports using regression analysis in Excel

This book is an excellent choice for valuators and other financial professionals ready to take the leap into regression analysis for more accurate, more objective business valuations.

Product details

• Authors: C Fred Hall, C. Fred Hall, F Hall, Fred Hall
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Hardback
• Released: 31.05.2021
• EAN: 9781119793427
• ISBN: 978-1-119-79342-7
• No. of pages: 192
• Subjects: Social sciences, law, business > Business > Business administration; Rechnungswesen, Bewertung, Accounting, Valuation