The National Center on Employee Ownership interviewed Advisory Director Patrice Radogna about valuating an ESOP in the current coronavirus environment.
National Center for Employee Ownership
Excerpt:
From a business appraiser’s perspective, if assumptions underlying any of the methodologies employed to determine value change significantly, then a valuation opinion as of a prior date may not be suitable for a current use. Some of the key factors that the COVID-19 virus is creating that uncertainty around include: future revenue orders, supplier risks, customer risks and overall market risk factors and market multiples of public guideline companies. To the extent that COVID-19 would materially impact the valuation, then the guidance for any fair market value valuation would suggest that the valuation needs to be updated.
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