Posts Tagged ‘valuation’
Mistake #2: Underestimating Expenses Causing Unrealistic Profit Forecasts
Welcome to the second installment of my Top 9 Valuation Mistakes blog series. In today’s post, we’ll examine Valuation Mistake #2: Underestimating expenses causing unrealistic profit. Let’s just quickly remind ourselves of the full nine valuation mistakes that analysts are in danger of making. The Top 9 Valuation Mistakes Overly optimistic revenue forecasts Underestimating expenses…
Read Full PostOverly Optimistic Revenue Forecasts: The #1 Valuation Mistake (and How to Avoid It)
What Is the #1 Valuation Mistake? Overly optimistic revenue forecasts are the most common and damaging mistake in company valuation. Research on the 540 largest companies in Asia shows that analysts miss revenue forecasts by approximately 10% on average, with an estimated 15% optimistic bias. Since revenue is the foundation of every valuation model —…
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