Customer Reviews

Valuing A Business, 4th Edition

5 star:		(4)
4 star:		(2)
3 star:		(1)
2 star:		(4)
1 star:		(1)

 

 

I take issue with the reviewer who suggested that Tom Copeland/McKinsey's book "Valuation" is better than this one or is more directed at valuaing big businesses. ... On the other hand, it should be said that valuation techniques do not differ between big companies and small companies (especially if big/small companies are publically traded). Valuation techniques vary depending on (a) what sort of asset is being valued (public equity, vs. private equity, vs. business assets as a whole, etc) and (b) why valuation is being done (for M&A, litigation between business partners, divorce, ESOPs, for equity investment/divestment). If an investor is valuing a $50 Billion public company and a $50 million public company, the technique used for both is (probably) the same.

If anything, this book does an excellent job in reminding us of the diversity of valuation techniques in use, and the diversity of reasons for doing valuations. Given the frequency with which privately held companies are bought, one would think that knowing how to value companies whose stock is not publically traded is useful for general businesspeople, not just accountants and attorneys. But if you absolutely insist that you just want to know how to value publically traded companies and don't give a hoot for calculating "private equity discounts" or "minority shareholder discounts", then I would recommend Aswath Damodaran's books "Damodaran on Valuation", "The Dark Side of Valuation" or "Investment Valuation". Damodaran, professor of Finance at NYU, actually uses the same techniques taught here, but applied to public equity investing and with different names (for example, what is called the "Market approach" here is just what Damodaran calls "relative valuation" in a different context).

I am a lawyer who has tried valuation cases and this book is a terrific resource for valuation experts and attorneys. I used it to defend and to attack witnesses. It is respected. It is used at the Federal Judicial Center as training for judges on these issues. It is not at all appropriate for people who are trying to value companies for investment purposes.

The authors have taken an approach from an accounting or legal standpoint. They haven't included methods incorporating EVA or contingent claims analysis. For as thick as this book is--and it is really thick--there is a surprising lack of detail. If you're looking to value companies of any significant size, buy the McKinsey book instead. If you're going to work with only closely held firms, estates, etc. then perhaps this book is for you.

I have found Mr. Pratt's book to be an outstanding and practical general reference guide to valuing privately-held businesses. Due to the book's breadth of material and balanced focus on both the science and art of valuation, I have found "Valuing A Business" to be an excellent professional reference for anyone entering the field of business valuation. I highly recommend it.

In addition to the common "science side" valuation techniques, issues, and approaches that are found in many valuation textbooks, Pratt provides unique, valuable insight into the "art side" of valuation. The book also includes real life project execution considerations for litigation support, expert witness testimony, and taxation. "Valuing A Business" offers solid information to assist a practitioner in building a quality framework for conducting a comprehensive private company valuation.

I bought this book long time ago (6-7 years) when I joined a private equity firm and was hungry for materials which taught valuation technique. Materials in this book is useful. In addition,there were few titles which discuss valuation of non-public companies at that time. This book, in fact, was also a reading material for the CFA exam back in 1995. However, the text is quite boring. Unless you really need to study information about valuation for non-public company, don't buy it for leisure

I had an older edition of this book, which wasn't very helpful, so I bought the new one hoping it was an improvement, but came away rather disappointed because, for an instructional manual, this one is hard to follow. Apparently, the authors have been in the valuation business for a long time, but it's not always easy to translate experience effectively into words. For most, this is a how-to project with potentially big consequences, so the instructions should be more clear than this. I liked "Unlocking the Value of Your Business" as an alternative. Once I read that book, I understood better what these guys were talking about.

I used this book a lot as an intern with investment bankers; massive, truly massive; believe me, there's a lot you don't know! I highly recommend it.

This book is ok, but you might find "Unlocking the Value of Your Business" to easier to follow. On the other hand, if you want a highly technical treatise, look Tuller's book.

The main problem with this book is that it seems to have been written with the goal of keeping valuation as some sort of arcane science, that only reveal its misteries to those initiated.

It seems like a justification for the existance of certified CPAs, CFAs ... many things are not properly explained.

On the other hand, the book is really serious. It's really comprehensive, and it somehow covers most valuation related matters.

It has nothing to do with the Valuation by Copeland. Copelands book is easier to read and explanations are better. But it's less serious and less complete. It focus only in the kind of valuations consultants do.

Pratt's book covers legal aspects, diffeernt assets, etc.

Overall, if you want a book to understand valuation and the shareholder value jargon, get Copeland's. If you are a lawyer or CPA actually working with companies and overviewing the whole deal, get Pratt's.

If you really want to cover all angles of valuation, get Damodaran's. And if you want to value technology, get Boer's.

I used this book frequently while pursuing my MBA (completed Dec 98). I would highly recommend this book for any student of Accounting or Finance. The author presents the most commonly accepted methods for valuating closely held companies in a cogent and understandable manner. While a few readers may desire a more detailed and mathematical explanation of valuation procedures, most readers will find the book satisfactory for their purposes.