Lost profits and related commercial damages for contract, business-tort, and business-interruption matters. The analysis builds the but-for revenue and cost path from the company's own history, its market, and the terms of the disputed relationship, links each claimed loss to the conduct at issue, addresses mitigation, and reasons through the period of loss so the damages figure answers the causation question as well as the amount.
KW Economics prepares lost profits analysis for plaintiff and defense counsel nationwide; the method is the same whichever side retains the economist.
Lost profits analysis at KW Economics is directed by Christopher Skerritt, M.Ed., MBA, Chief of Economic Services, who is available to testify to it.
How lost profits analysis applies to the specific demands of each case type: methodology, deliverables, and what counsel should expect.
As the difference between the profits the business would have earned had the conduct at issue not occurred and the profits it actually earned or could have earned by mitigating. The but-for path is built from the company's own history, its pre-dispute projections, its market, and the terms of the disputed relationship, and only the incremental margin lost is claimed, not the gross revenue.
Financial statements and tax returns for several years, sales and cost detail by product or customer, the contracts at issue, budgets and forecasts prepared before the dispute, and industry and market data for the loss period. Records prepared before the dispute carry the most weight because they were not written with the claim in mind.
From the contract term, the time the business would reasonably need to replace the lost volume, and the market conditions during the loss period. An open-ended period is scrutinized closely, so the report reasons through when the loss ends and shows how the total changes under a shorter or longer period.
Each claimed loss is linked to the conduct at issue and separated from losses that market conditions or the company's own decisions would have caused anyway. Mitigation revenue and any costs avoided are credited against the loss, and future lost profits are discounted at a rate that reflects the risk of the earnings stream, with the rate stated and its effect shown.
No state licenses forensic economists. Qualification to testify on lost profits analysis is decided case by case on education, method, and testimony history; these pages explain what each credential establishes and what it does not.
Request a consultation on Lost Profits or call (201) 343-0700. Plaintiff and defense counsel.