In re Marriage of Rosen

Summary

The court reversed a goodwill valuation of a professional practice because the expert's capitalization of excess earnings method was misapplied, and emphasized that goodwill must be supported by earnings in excess of what a comparable professional would earn.

What it means for the financial analysis

Rosen is a reminder that method alone does not carry a valuation. The comparable compensation benchmark and the capitalization rate have to be supported, documented, and internally consistent.

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