What information do you include when creating a "football field" valuation graph?

Study for the IB Vine Valuation Test. Master the essential techniques with multiple choice questions and detailed explanations. Prepare efficiently for your exam!

In creating a "football field" valuation graph, it is essential to include a range of statistical metrics to provide a comprehensive view of valuation outcomes. The median, minimum, maximum, and percentiles of the set values allow for a more nuanced understanding of the valuation distribution. By incorporating these figures, the graph effectively illustrates the range of potential valuations, offering insight into how different methodologies can yield varying results.

This approach helps stakeholders evaluate the central tendency and dispersion of the valuations, providing context around what is typical (median) versus what is extreme (min and max). Including percentiles further enhances this understanding by illustrating how values are spread across the spectrum—critical for identifying outliers or trends in the data. Such a detailed representation is valuable for decision-making, especially when considering how different valuation approaches can vary and what that means for the business or asset being analyzed.

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