Dark Side of Valuation, The: Valuing Young, Distressed, and Complex Businesses, Third edition

12

Winding Down: Declining Companies

Chapter 9 examined firms at the earliest stages in the life cycle and wrestled with how best to build in the reality that most young idea firms do not survive to become healthy businesses. Chapter 10 moved forward in the life cycle to look at growth firms, and our biggest challenge became estimating growth rates as firms become larger and competition enters the business. In Chapter 11, we continued further up the life cycle to look at mature companies, a grouping that most growth companies seek to avoid but inevitably join. We discussed the valuation consequences of acquisitions and management changes. In this chapter, we turn to the final phase of the life cycle—decline—and examine the key questions that ...