Navigating business valuation uncertainty amid Covid-19 crisis

The economic and market environment today is characterized by the unprecedented levels of uncertainty brought by the coronavirus disease 2019 (Covid-19) pandemic. Stock markets around the world are experiencing dramatic declines and extreme volatility as investors sell off their equity investments and flee to assets considered safe havens (e.g., gold and government debt). The full extent of the economic and business disruptions, duration of the crisis, time to recover, shape of recovery and possibility of a second wave of Covid-19 infections are still unknown. All these factors have made valuations challenging.

However, significant valuation uncertainty does not necessarily mean that no valuation can be carried out. Valuation specialists should carefully assess and evaluate the inputs to valuations and adjust accordingly to incorporate current market conditions.