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Tangible Book Value for Insurance Companies
We're calculating the multiples of the public companies (in 1986) so that we can select a multiple for our subject company (private). In that case, I've been told that the multiple to use is the Tangible BV. In other words, BV minus intangible assets minus DPAC. However, this DPAC is such a large...
We're calculating the multiples of the public companies (in 1986) so that we can select a multiple for our subject company (private). In that case, I've been told that the multiple to use is the Tangible BV. In other words, BV minus intangible assets minus DPAC. However, this DPAC is such a large item on the balance sheet for some (like AFLAC, Torchmark, Washington National) that the residual BV is meaningless (often negative), and inflates the multiple. This guy at Deloitte is telling me that the TBV should only be BV minus intangibles: forget the DPAC. But all the Web definitions of an insurance company's TBV says, I should subtract DPAC?
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by Guest 1.
added 11 years ago
