What’s the valuation Rx for unhealthy companies?
Abstract: The recession has taken its toll on many companies. Factors driving companies to the brink of bankruptcy include weak demand, scaled-back corporate budgets and rising commodity prices. This brief article discusses the warning signs of trouble, including late or missing financial records; deferred maintenance, repair and equipment updates; and sales of fixed assets to generate cash. It then points out how valuators can work with management to help distressed companies accurately project value in light of turnaround plans as well as determine liquidation value if needed.