How is the valuation range typically presented to a company or its investors?

• A. Cash flow statements
• B. Pie charts
• C. Valuation summary report
• D. Football field chart

Answer: (D)

The valuation range is often visually represented using a football field chart because it succinctly illustrates a range of values derived from various valuation methods, such as comparable company analysis, precedent transactions, and discounted cash flow analysis. This chart provides an effective visual representation by displaying the low, high, and mid-range valuations in a clear and concise manner, allowing stakeholders to quickly assess the valuation metrics.

The football field chart is particularly valuable in presentations because it helps facilitate discussions with potential investors or company management by showcasing a range of possible valuations in a straightforward format. It allows viewers to understand where the company's valuation falls in relation to industry standards or market expectations.

In contrast, cash flow statements primarily focus on the liquidity and financial performance of a company over time but do not summarize valuations. Pie charts typically display proportions or distributions within a whole, and while they can be useful for some types of data presentation, they are not effective for showing valuation ranges. A valuation summary report could provide detailed valuations and analyses, but it lacks the quick visual impact that a football field chart provides.