“Back to Basics – COVID-19’s Impact on Micro and Small Business Valuation” is a Business Valuation Article on Small and Micro Business Valuation during a time of extreme risk due to Covid-19 appearing in Quick Read a NACVA Journal on Business Valuation.
Businesses were thrown for a loop when Covid-19 hit. It is reported that over 100,000 business have closed their doors due to fear of congregating, shut down orders, stay home orders and changes in consumer and business actions and habits.
This sea change for business certainly increased risk as measured by finance and business valuation professionals. Risk for financial analysts is the likelihood that projected cash flows will be met. How to measure the project micro and small business value during times of high risk caused by Covid-19 requires a back to basics approach.
In this article Greg Caruso proposes that business has been under unforeseen stress before. The gas crisis in the ’70’s, the Savings & Loan crisis in the 1990’s, the housing mortgage bubble in 2008, and other shocks provide historic perspective and call for a back to basics approach when valuing small and micro businesses.
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