The Qualitative Assessment is designed to provide transparency in capturing the subjective input of valuation experts—like yourself—when assessing a company's risk. This assessment allows you to systematically evaluate various risk factors, ensuring a structured approach to qualitative judgment.
How the Assessment Works
Each factor in the Qualitative Assessment is assigned a weight, displayed on the right side of the interface. This weight determines the extent to which an individual factor influences the final risk calculation.
Scoring System
Risk factors are evaluated on a scale from 1 to 5, with 3 as the default value.
A score of 3 represents the industry average (or a typical value within the selected peer group).
Scores above or below 3 indicate higher or lower risk relative to competitors and industry standards.
Industry Context Matters
It’s important to note that these assessments are always relative to industry norms.
For example, a score of 4 for company size will mean something entirely different for a pharmaceutical company versus a restaurant. Context is key when making these qualitative adjustments.
By leveraging the Qualitative Assessment effectively, you can refine your risk evaluation with expert-driven insights while maintaining a structured and transparent approach.