Topic 37. Business valuation (OB)

The subject of OB is the market value of the capital of the company being valued.

3 approaches to OB: profitable, costly, comparative. Each of them relies on specific information and evaluates different aspects.

1) Profitable - defines the cost of equity as the sum of the current values ​​of the future income of the enterprise. Information: forecast data on sales proceeds, cash flow. It is impossible to apply for enterprises with significant financial assets, but in the conditions of a stable financial crisis.

2) Cost approach - defines the cost of a company's equity capital as the sum of the market value of its assets minus borrowed funds. Information for calculation: the current state of assets and debts. The cost of assets = the total cost of their recreation - depreciation. The scope of the approach is a company with significant tangible assets. Otherwise, the appraiser will face the problem of determining the market value of intangible assets.

3) Comparative approach - the value of the company's own capital is determined by the time it takes to sell it in the presence of a sufficiently formed market. The probable price of the business being valued may be the actual sale price of a similar firm listed on the market.

The results of the comparative method are quite effective and have a good objective basis. 2 types of information:

1) market (price) - data on the actual prices for the purchase and sale of shares of a similar company.

2) financial - accounting statements for the current year and previous periods, financial statements, other information (usually for 5 years).

3 comparative approach methods:

1) analogue company method (capital market method) - based on the use of prices formed by the open stock market.

2) the method of transactions (sales) - focused on the acquisition price of the enterprise as a whole or a controlling stake.

3) the method of industry coefficients (ratios) - uses the recommended relationship between the price and certain financial parameters. (this method is not very common due to the small information base)

Authors: Shevchuk D.A., Shevchuk V.A.

<< Back: Problems of lending to the real sector of the Russian economy

>> Forward: Valuation Methods and Fundamentals of Mortgage Investment Analysis

We recommend interesting articles Section Lecture notes, cheat sheets:

▪ Conflictology. Crib

▪ Organizational behavior. Crib

▪ History of the state and law of foreign countries. Crib

See other articles Section Lecture notes, cheat sheets.

Read and write useful comments on this article.

<< Back

Latest news of science and technology, new electronics:

The existence of an entropy rule for quantum entanglement has been proven 09.05.2024

Quantum mechanics continues to amaze us with its mysterious phenomena and unexpected discoveries. Recently, Bartosz Regula from the RIKEN Center for Quantum Computing and Ludovico Lamy from the University of Amsterdam presented a new discovery that concerns quantum entanglement and its relation to entropy. Quantum entanglement plays an important role in modern quantum information science and technology. However, the complexity of its structure makes understanding and managing it challenging. Regulus and Lamy's discovery shows that quantum entanglement follows an entropy rule similar to that for classical systems. This discovery opens new perspectives in the field of quantum information science and technology, deepening our understanding of quantum entanglement and its connection to thermodynamics. The results of the study indicate the possibility of reversibility of entanglement transformations, which could greatly simplify their use in various quantum technologies. Opening a new rule ... >>

Mini air conditioner Sony Reon Pocket 5 09.05.2024

Summer is a time for relaxation and travel, but often the heat can turn this time into an unbearable torment. Meet a new product from Sony - the Reon Pocket 5 mini-air conditioner, which promises to make summer more comfortable for its users. Sony has introduced a unique device - the Reon Pocket 5 mini-conditioner, which provides body cooling on hot days. With it, users can enjoy coolness anytime, anywhere by simply wearing it around their neck. This mini air conditioner is equipped with automatic adjustment of operating modes, as well as temperature and humidity sensors. Thanks to innovative technologies, Reon Pocket 5 adjusts its operation depending on the user's activity and environmental conditions. Users can easily adjust the temperature using a dedicated mobile app connected via Bluetooth. Additionally, specially designed T-shirts and shorts are available for convenience, to which a mini air conditioner can be attached. The device can oh ... >>

Energy from space for Starship 08.05.2024

Producing solar energy in space is becoming more feasible with the advent of new technologies and the development of space programs. The head of the startup Virtus Solis shared his vision of using SpaceX's Starship to create orbital power plants capable of powering the Earth. Startup Virtus Solis has unveiled an ambitious project to create orbital power plants using SpaceX's Starship. This idea could significantly change the field of solar energy production, making it more accessible and cheaper. The core of the startup's plan is to reduce the cost of launching satellites into space using Starship. This technological breakthrough is expected to make solar energy production in space more competitive with traditional energy sources. Virtual Solis plans to build large photovoltaic panels in orbit, using Starship to deliver the necessary equipment. However, one of the key challenges ... >>

Random news from the Archive Babies scream in different languages 02.09.2016 It seems to us that babies cry the same way everywhere, and it’s just stupid to talk about any language differences here - newborns can’t even speak. However, in fact, there are differences between them, at least when comparing children from China, Germany and Cameroon. It's all about the difference between tone and non-tone languages. As you know, in many languages ​​the meaning of a word depends on the sound pitch at which it is pronounced; pitch variations of syllables and words can completely change the meaning of what we are talking about. One example is Mandarin Chinese, including its variety Putonghua, which is an official language in China, Taiwan, and Singapore. Northern Chinese has four tones. A more complex case is Lamnso, the language of the Nso people living in Northern Cameroon. Nso communicate with each other already on eight tones, and the meaning of each tone is determined by its variations during the pronunciation of a particular word. When researchers from the University of Würzburg, the University of Osnabrück and Beijing Normal University compared the sounds made by infants whose mothers spoke German, Mandarin and LamNso, it turned out that the cry of "tonal" children was different from the cries of "non-tonal". Thus, in the cries of NSO infants, the interval between the highest and lowest tone was wider, and the children easily and quickly moved from height to height compared to newborns whose mothers spoke German. In general, the cries of the Cameroonians partly resembled singing. The same results were obtained when comparing babies from Germanic mothers with babies whose mothers spoke Chinese, only here the differences were not so noticeable - probably because the Chinese language is still "less toned" than Lamnso. The researchers analyzed the cries of children who were only a day old. New data support the hypothesis that language acquisition by a child occurs already in the later stages of pregnancy: according to the authors of the work, the baby hears the mother’s speech while still in her womb, and already at this time his brain absorbs some pronunciation rules.

Other interesting news:

▪ alarm clock gene

▪ Magnetic system that converts heat into mechanical motion

▪ Unbreakable display from Samsung

▪ Fat causes depression

▪ Livescribe Echo Smartpen Gadget

News feed of science and technology, new electronics

Interesting materials of the Free Technical Library:

▪ section of the site Labor protection. Selection of articles

▪ article List of OBZhD and GO terms. Basics of safe life

▪ article What were the candies in ancient Rome? Detailed answer

▪ article Ternovnik. Legends, cultivation, methods of application

▪ article Storage devices. Encyclopedia of radio electronics and electrical engineering

▪ article Simple FM transceiver. Encyclopedia of radio electronics and electrical engineering

Leave your comment on this article:

All languages ​​of this page

Arabic	Hebrew	Polish
Bengali	Hindi	Portuguese
Chinese	Italian	Spanish
English	Japanese	Turkish
French	Korean	Ukrainian
German	Malay	Vietnamese

Home page | Library | Articles | Website map | Site Reviews

www.diagram.com.ua
2000-2024