You have likely heard a thing or two about the recent increases in inflation. With annual inflation rates reaching levels not seen in over 40 years, increasing prices seem to permeate almost every aspect of daily life. Some of the inflationary increases are related to the lingering effects of Covid-19 and shortages in staffing and supplies. Others are based on rising costs in the transportation of goods, while others are due to increased compensation of qualified personnel.
For businesses in the healthcare industry, the question remains: what will revenue and expenses look like tomorrow? That question becomes even more pronounced when a business is preparing for a transaction that includes a fair market value analysis.
Business valuation is often said to be both an art and a science. Meaning that every conclusion is reached using both qualitative and quantitative analyses. Certain qualitative assessments are especially critical when developing projected revenue and expenses for healthcare entities. In today’s unique economic environment, a thorough review of each revenue and expense line item is required to assess the future benefit stream used to determine the value conclusion.
Some questions for the valuation analyst to keep in mind when preparing a business valuation of a healthcare entity in today’s market include the following:
A qualified valuation analyst should be able to discuss these and other questions with management. The world of healthcare is full of nuances that require a familiarity with overall industry trends and ongoing initiatives among the major stakeholders within the healthcare industry. Coker has a long and established history of assisting with independent, fair market value analyses to support the transactions of various entity types. Our team of experienced certified valuators will provide a detailed independent analysis for each entity, resulting in a fair and defensible valuation conclusion.