The Dark Side of Valuation: Valuing Young, Distressed, and Complex Businesses (2nd Edition)

Renowned valuation expert Aswath Damodaran reviews the core tools of valuation, examines today’s most difficult estimation questions and issues, and then systematically addresses the valuation challenges that arise throughout a firm’s lifecycle in The Dark Side of Valuation: Valuing Young, Distressed and Complex Businesses.

In this thoroughly revised edition, he broadens his perspective to consider all companies that resist easy valuation, highlighting specific types of hard-to-value firms, including commodity firms, cyclical companies, financial services firms, organizations dependent on intangible assets, and global firms operating diverse businesses. He covers the entire corporate lifecycle, from “idea” and “nascent growth” companies to those in decline and distress, and offers specific guidance for valuing technology, human capital, commodity, and cyclical firms. Damodaran places special emphasis on the financial sector, illuminating the implications of today’s radically changed credit markets for valuation and addresses valuation questions that have suddenly gained urgency, ranging from “Are U.S. treasuries risk free?” to “How do you value assets in highly illiquid markets?” Readers will gain insight into:

· Overcoming the temptation to use unrealistic or simplistic valuation methods

· Risk-free rates, risk premiums and other macroeconomic assumptions

· Intelligent analysis for angel and early venture capital investing

· Projecting the impact of regulatory changes

· The stages of the corporate lifecycle

· Valuing financial services and commodities companies

Damodaran’s insights will be indispensable to everyone involved in valuation: financial professionals, investors, M&A specialists, and entrepreneurs alike.

Customer Reviews:

For those, who seek more precise approach to valuation

By Alexey Sulinov - June 7, 2011

Very useful for those who want to improve and broaden their valuation skills. It also helps a great deal with emerging markets peculiarities. Although I've noticed that some parts of the book are just copies of Damodaran on Valuation (2006).

Great update of previous edition

By JCFerrario - July 16, 2011

On a convenient update of the previous edition, this book ensures the commitment of the author of teaching valuation through a permanent and increasingly deeper exploration of the theme viz a viz the recent macroeconomic environment forces and taking in consideration the life cycle of valuation for different business phases. The revision of the basic tools in chapters 2 to 5 makes the book adequate to readers with any level of knowledge.

outstanding book!

By The Tao of Netflix - April 23, 2012

this book was very valuable for me. the fact is its rare for a company to fit the neat parameters of a typical valuation exercise. most companies have something unique that requires flexibility in valuation, and this book presents a wealth of different approaches for dealing with atypical facts. one of the best aspects of the book is its treatment of the business lifecycle (from earliest idea generation phase, through maturity and then decline), and specific approaches for valuing companies regardless of where they are in the cycle. my current real life challenge is to value companies having very early stage R&D projects; the book gave me great insights into approaching those concepts as if they're early stage businesses, and how i can draw on extrapolated public company data to estimate the necessary inputs (e.g., operating expenses and so on). my only complaint (and its fairly minor) is its incomplete treatment of simulation (e.g., monte carlo) for dealing with difficult... read more