Taking a red pen to financial statements – Adjustments a must for many private business valuations

Description

Abstract: Financial statements are an important source of valuation data, but they tell only part of the story. An accurate appraisal hinges on a comprehensive understanding of the subject company’s relative performance and earnings power. This article explains how, to clarify matters, an appraiser often makes various financial statement modifications, including nonrecurring, normalizing, control and balance sheet adjustments. (Updated 2/7/12)