Coronavirus’s impact on business valuations

14 Apr 2020

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Uncertainty caused by Coronavirus is likely to impact on business valuations in a number of ways.

Increased uncertainty over the future returns that businesses may be able to generate may have an adverse impact on valuations in a number of industries. Coronavirus is also having an impact on the selection of valuation approaches. The availability and validity of comparable market data, as well as the difficulty in assessing expectations of maintainable future earnings is likely to increase the difficulty that is already inherent in business valuation. Such impacts could lead to a temporary shift away from some commonly used valuation approaches. Careful consideration will need to be given by valuation practitioners in determining appropriate valuation methodologies to use during these uncertain times.