There is a hard truth in transaction work that some people never fully accept: A valuation is not a tool designed to rescue a deal that does not work. It is not there to preserve momentum. It is not there to protect expectations. And it is certainly not there to manufacture support for a price … Continue reading A Valuation Is Not a Tool to Rescue a Bad Deal

One of the most important inflection points in a valuation engagement occurs the moment adjusted free cash flow turns negative. That is not a minor inconvenience. That is not something to be explained away with enthusiasm, optimism, or deal fatigue. That is a serious analytical event. Too often, people look at reported earnings and assume … Continue reading Negative Free Cash Flow Is Not a Rounding Error

One of the most common mistakes in lower middle market and SBA transactions is the assumption that “asset-heavy” automatically means “well supported.” It does not. A business may have substantial fixed assets. It may have meaningful inventory. It may present a balance sheet that appears to offer a backstop to the transaction. But appearance is … Continue reading Asset-Heavy Businesses Still Require Credible Asset Evidence

There is a pattern I have seen many times over the years. A transaction has a valuation problem. The obvious solution is to obtain better evidence. An equipment appraisal is needed. An inventory review is needed. Some additional diligence is necessary to determine whether the value can actually be supported. And then someone says: “We … Continue reading The Cheapest Path Is Often the Most Expensive One

One of the most valuable things a valuation professional can say to a client is this: “Based on the information provided so far, this purchase price is unlikely to be supported.” Many people do not want to hear that sentence. They should. Because that sentence, delivered early enough, saves time, money, and false confidence. In … Continue reading Early Bad News Is a Professional Courtesy

There is a moment in some valuation assignments when the tone shifts. The client stops asking questions designed to understand the analysis. And begins asking questions designed to escape it. That distinction matters. A serious client wants clarity. A pressured client often wants a workaround. Once that shift occurs, the engagement becomes more delicate. Because … Continue reading The Moment Clients Start Negotiating with the Math

A valuation professional has an obligation to the assignment. Not to the momentum of the transaction. Not to the emotional investment of the parties. Not to the need for everyone involved to “get to closing.” That distinction is easy to say. It is harder to live by when the pressure begins. Because in many deals, … Continue reading The Role of the Appraiser Is Not to “Make the Deal Work”