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
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.
Coronavirus Resource Center
Have more questions about the impact of the coronavirus on your business? Visit Marcum’s Coronavirus Resource Center for up-to-date information.