• Determine the complete financial harm to a carrier who had one of its planes crash.
• The carrier filed a lawsuit against one of its suppliers for failing to maintain sufficient quality in its work.

The Challenge

• Harm caused by a plane crash is broad in scope and scale and contains many factors.
• There is harm to the brand affecting future sales.
• There is direct financial damage from payments to passengers’ families.
• Other changes in the market occur making it difficult to separate the effects of the crash from market factors.

The Solution

• A number of methods were used to estimate corporate value before and after.
• One method used advanced econometric techniques to compare enterprise value based on stock price to other industry participants. Adjustments for differences across competitors, the endogenous effect of the crash on the industry, differences over time were included.
• Another method used the discounted cash-flow model to examine the fundamental value of the company before and after. The "but-for" measure was created and used as a comparison.

The Deliverables

• A final report was completed that fully explained the results and methodologies.

The Results

• The client is very secure with the findings and the bases thereof.

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