By Paul B. Finch, MBA | 7/16/2025

From a financial valuation perspective, early analysis of the Trump Administration’s “Big Beautiful Bill” (the “Bill”) indicates that it will likely have varying effects on business valuations by industry, creating “winners” and “losers” based on available subsidies as well as specific/targeted tax policies.

The Likely “Winners”:

Capital-Intensive Firms: For Manufacturing and other Capital-Intensive Firms, the Bill codifies permanent accelerated depreciation (section 179 and bonus depreciation) creating favorable business deductions specific to taxation that result in reduced tax burdens while leaving longer-term straight-line depreciation/amortization intact for measuring GAAP earnings. All other things remaining equal, the prospects for reduced tax burdens will likely enhance free cash flow and firm values utilizing Income Approaches, as well as increased capital investment capacity enabling long-term sustainable growth.
R&D-Intensive Firms: Technology and other R&D-Intensive Firms (including biotech and aerospace firms) will benefit from the Bill’s restoration of expensing for domestic R&D creating favorable business deductions specific to taxation that result in reduced tax burdens. All other things remaining equal, the prospects for reduced tax burdens will likely enhance free cash flow and firm values utilizing Income Approaches, where economic normalized financial statement adjustments can (and should) allow for longer-term amortization of R&D expenses that increase earnings.
Traditional Energy Firms (Fossil Fuels): Traditional Energy Firms will benefit from the Bill’s streamlining of permitting processes as well as provisions that allow for AMT relief. All other things remaining equal, this regulatory and tax relief will likely enhance earnings, free cash flow and firm values utilizing Income Approaches.
Consumer-Facing Firms: Firms in the retail space, food service, and hospitality will enjoy a temporary exemption of tips and overtime from income tax, which will increase employee net take-home pay. All other things remaining equal, this could result in modest improvements in labor stability in the near term, however, these benefits sunset after 2028 creating problems as it pertains to long-range budgeting/forecasts.

The likely “Losers”:

Healthcare: Significant cuts to Medicaid may reduce patient volumes and increase uncompensated care for healthcare providers and managed care organizations. This can mean lower revenue projections and decreased earnings and reduced valuations, especially in states that do not supplement lost federal funds.
Clean Energy: The repeal of many clean-energy tax credits and subsidies likely undermines previously budgeted/projected earnings for solar, wind, EV infrastructure, carbon capture, and green hydrogen. This will likely result in higher cost of capital, reduced earnings, and increased assets impairments costs adversely affecting earnings for these firms, especially in their early stages of development.

Paul B. Finch, MBA, is co-founder and Executive Director of Benchmark Solutions, Inc. and is an accomplished Strategic Financial Advisor. Professionally, Paul has focused his career on the various facets of corporate finance that revolve around the creation and measurement of equity value for his clients. Paul’s work includes both domestic and international merger and acquisition engagements as well as projects specifically designed for the purpose of increasing profitability, earnings quality, and growth prospects (while limiting risks and exposures) for his clients. Paul is a recognized subject matter expert in Financial Planning & Analysis, Capital Acquisition, and Business Valuation as well as Merger and Acquisition Advisory and has published many articles pertaining to these topics. You can contact Paul at paul.finch@benchmarksolutions.us.com

Benchmark Solutions, Inc. is a boutique business advisory that provides Financial Planning and Analysis, Business Valuation, Capital Acquisition, and Merger and Acquisition Advisory services to some of the most innovative, creative, existing and emerging companies in the agriculture, beverage, healthcare, and hospitality industries.