Recent Performance - It is what it is!

All too often I hear printers tell me that although their sales were pretty decent in 2007 and 2008, their sales fell dramatically in 2009. Following that statement, they then want to argue in favor of valuation approaches that places less emphasis on their 2009 performance in exchange for valuations that favor prior years.

Sorry, that doesn't sit too well with most buyers.

First, believe it or not, not all businesses saw their sales drop off in 2009. Some actually held their own and others actually increased sales. Now, if we are going to reward someone for their effort it ought to be the latter who in the face of significant odds actually succeeded in 2009 when so many others did not!

Second, I think the tune we would be hearing would be far different if sales had increased in 2009. In these cases, everyone would want us (me) to point at the 2009 performance and give full credit for these increases.

So, while it appears that almost everyone is in agreement that significant weight ought to be given to the most recent year's sales when those sales are up, we get some pretty divergent opinions when those "last year's" sales tank. "Oh, we need to look at previous years when sales were up, and sort of ignore last year's sales because they were down... heck, everyone was down, weren't they?"