“It’s ok to not be ok.”

Sounds like a K-drama title, but we’re actually referring to the impact of the war on our target company’s packaging costs.

During recent valuation work, several customers shared the same concern:
“Costs have jumped so much that margins collapsed.”

And they’re right — this kind of shock can heavily affect projection assumptions.

However, one bad year doesn’t define the whole valuation.
When preparing assumptions, we also look at:

😎Historical costs,

😎Industry forecasts, and

😎How long the shock is expected to last.

If the impact is short-lived, it should only affect the early years of the projection — not the terminal years. In those cases, the company is expected to recover to its pre-crisis operating state.

Of course, if the crisis is long-lasting or structural, that’s a different story. But for temporary shocks, we adjust without letting an outlier year distort the entire picture.

#ORNA #DCF #BusinessValuation #Consult