Is valuation an art or a science?
Answer
It’s an art supported by science-like tools. Although valuing a company is built off tools and data-driven assumptions, it still requires a load of subjective judgment when selecting companies, interpreting results and adjusting for qualitative factors. When you think about delicately crafting a highly-attractive candidate, it’s somebody that can use the tools at their disposal effectively, not just memorize what they do.
Why this matters to bankers
In order to really understand valuation and excel in each aspect, bankers must understand the purpose of valuation at its core.