{"id":2675,"date":"2020-04-30T09:00:47","date_gmt":"2020-04-30T13:00:47","guid":{"rendered":"http:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/?p=2675"},"modified":"2020-06-04T14:23:11","modified_gmt":"2020-06-04T18:23:11","slug":"forecasting_during_covid-19","status":"publish","type":"post","link":"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/forecasting_during_covid-19\/","title":{"rendered":"COVID-19: Forecasting During Covid-19 without a Crystal Ball"},"content":{"rendered":"

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\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\tBlog 4\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t

\n\t\t\t\t\t\tCOVID-19 Mini Series\t\t\t\t\t<\/h2>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t
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In this blog, we discuss\u00a0the use of estimates, judgement, and forecasts in the context of Covid-19.<\/p>\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n[\/alternating_content_container][basic_container container_size=”container container-narrow”][vc_column_text]<\/p>\n

This is the fourth blog in Davis Martindale\u2019s \u201cCovid-19 Mini Series\u201d.\u00a0<\/em><\/strong><\/h4>\n

In our previous Covid-19 blogs, we discussed:<\/strong><\/p>\n

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  1. the timeline of the build up to the current social distancing measures<\/a>;<\/li>\n
  2. use of hindsight in valuation -whether knowledge of the economic impact of Covid-19 can be incorporated into a value determination<\/a>; and<\/li>\n
  3. potential Covid-19 disclosures, and reporting options that you may see in valuation reports<\/a>.<\/li>\n<\/ol>\n

    In this blog, we discuss\u00a0the use of estimates, judgement, and forecasts in the context of Covid-19.<\/strong><\/p>\n

    We are living through a very challenging and uncertain time. There isn\u2019t any doubt that the Covid-19 crisis has caused health, social, and economic impacts worldwide. This has led to public policy measures being implemented to contain the virus\u2019 spread, which have resulted in significant operational disruptions for many companies. These public policy measures have forced businesses to respond in real time to new information, and advice.<\/p>\n

    Stock markets are being tested with daily volatility, as businesses of all sizes have been affected. But do the indicators affecting the stock markets, and large public companies, translate to having a similar affect in value for small and medium sized entities?<\/p>\n

    This depends on many factors. All valuations require the use of both estimates, and judgement. The impact of this pandemic will place increased emphasis on estimates, and judgement used for 2020 valuation dates. While most sectors are negatively impacted, some are thriving. The pandemic will create distinct winners and losers.<\/p>\n

    Forecasting Future Results Considerations<\/h4>\n

    An important factor to consider when forecasting future economic results, and valuing a business during Covid-19, is how long the disruption is expected to last. While assessing recovery expectations, one may consider the different shapes of economic recovery that are possible during, and after Covid-19:<\/p>\n