BV190 Valuing a Business via Monte Carlo Simulation

Webinar Description

This webinar will provide an introduction to the concept of Monte Carlo Simulation. A start-to-finish presentation will be provided in developing an MCAPM discount rate, capitalization rate, and value indication via a "standard" Monte Carlo simulation employing Crystal Ball. Additionally, the presentation of a companion Probabilistic, i.e.., statistically expected future cash flow growth rate Excel based calculator. To wit: "The calculation of an expected future cash flow requires the estimation of potential future cash flows under different scenarios, to which probabilities are then attached.". Ibbotson SBBI 2012 Valuation Yearkbook, p. 16. We will discuss what the courts are saying about Monte Carlo, and lastly we will conclude with potential circumstances for valuation employing the Monte Carlo simulation.

Webinar Audience

Business valuation professionals

Instructor Information

Toby Tatum | Alliance Business Appraisal, LLC

Toby Tatum, MBA, CBA, CVA, MAFF, is a Business Valuation and Transfer Expert with substantial experience in the valuation of privately owned companies with a key focus on small and midsize businesses with annual sales revenue up to $20 million. He is former President, CEO and CFO of a multiple-location franchised restaurant business. Tatum is a Certified Business Appraiser conferred by the Institute of Business Appraisers. 

Learning Outcomes

Upon webinar completion, the participant will be able to:

• Explanation of Monte Carlo simulation;
• Develop and interpret a value indication or value opinion employing Monte Carlo simulation via Oracle Software's Crystall Ball;
• Analyze a high-end Monte Carlo simulation add-in to Excel; and
• Identify when and why to use the analytical methodology.