The effect of the coronavirus in Australia, has impacted different businesses in a variety of different ways. These impacts need to be considered when doing appraisals or business valuations. Some main concepts for adjustments are addressed in this article.
Many businesses have experienced extraordinary trading, since the Coronavirus was announced as a pandemic, in the middle of March 2020. Some businesses have had increased sales revenue and profits, whilst many others suffered reduced profits.
Businesses in the hospitality and tourism sectors have experienced significant losses due to forced closures. In addition, there has been a range of government incentives and rent reductions, that have supported businesses since the middle of March 2020.
Given that the 2019/20 financials for many businesses, were affected by so many extraordinary factors, extreme care must be taken in using them to value a business.
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