Economic Damages

In an economic damages analysis, a business valuation is utilized to determine the loss in value of a business resulting from a harmful event. An economic damages analysis compares a business's "but-for value," which is the value of the business had the wrongful event never occured, against the business's "actual value," which is the business's real-world value following the wrongful act.

To ensure legal defensibility, a valuation professional must follow a seqential workflow:

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1. Establish the Valuation Date: Determine the exact date of the wrongful event or      economic impact materialized.

2. ​Perform the "But-For" Valuation: Determine the value of the business as of the valuation date assuming that the wrongful event did not happen.

3. Perform the "Actual" Valuation: Determine the value of the business as of the valuation date, factoring in the actual consequences of the wrongful act.

4. Calculate the Loss of Value: Subtract the "actual" value from the "but-for" value to quantify the economic loss.

5. Evaluate Mitigation: Adjust the final economic loss downward if the plaintiff failed to take reasonable steps to limit the business's financiall loss.

​​​​​​Our economic damage analyses include a comprehensive evaluation of financial losses resulting from various factors. We assess direct and indirect impacts on revenue, productivity, and overall market performance. Through detailed data collection and expert, we aim to provide a clear understanding of the economic implications involved. Let us help you navigate complexities effectively.