In a recent publication by the Institute of Business Appraisers, Business Appraisal Practice: 2016 Second Quarter, there was discussion over the topic of Monte Carlo simulation and its application to the valuation world. The survey conducted by Toby Tatum, MBA, CBA, CVA, MAFF, editor of Business Appraisal Practice, showed that 34.55% of surveyors had never heard of Monte Carlo simulation or if they had, knew little about it. Along with this, of those that actually knew about it, 27.78% had never used it in a business valuation. Within this article, and the many others within the publication, there is plenty of discussion about the validity and usefulness of its application. The articles discuss both practical application to standard valuation engagements, as well as, the method’s interpretation within a court of law. While the peer-reviewed journal brought forth conversation on an extremely important topic, it is unfortunate that this essential technique is not considered standard within the valuation industry today.
©2017 CS3 Advisors | All rights Reserved
This website is owned by CS3 Advisors. CS3 Advisors is independent from Sage and is not authorized to make any statement, representation, or warranties or grant any license or permission on behalf of Sage regarding any product, service, or website content. Certain materials made available on or through this website are owned by Sage and cannot be used without the prior written permission of Sage.