Top PDF COMPANY VALUATION METHODS BASED ON PATRIMONY

COMPANY VALUATION METHODS BASED ON PATRIMONY

COMPANY VALUATION METHODS BASED ON PATRIMONY

The methods used for the company valuation can be divided into 3 main groups: methods based on patrimony, methods based on financial performance, methods based both on patrimony and on performance. The company valuation methods based on patrimony are implemented taking into account the balance sheet or the financial statement. The financial statement refers to that type of balance in which the assets are arranged according to liquidity, and the liabilities according to their financial maturity date. The patrimonial methods are based on the principle that the value of the company equals that of the patrimony it owns. From a legal point of view, the patrimony refers to all the rights and obligations of a company. The valuation of companies based on their financial performance can be done in 3 ways: the return value, the yield value, the present value of the cash flows. The mixed methods depend both on patrimony and on financial performance or can make use of other methods.
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Integration of MACBETH and COPRAS methods to select air compressor for a textile company

Integration of MACBETH and COPRAS methods to select air compressor for a textile company

The main objective of this paper is to select the best air compressor for a spinning mill of a textile company. This textile company established in Denizli and it is a fully integrated facility which performs production of spinning, weaving, knitting, dying and confection. Their major product range includes all kinds of towels & bathrobes, kitchen home textile products, home wear and beach wear products. The textile company decides to buy an air compressor for using in its spinning mill. They need screw air compressor driven by inverter motor. This kind of air compressor which is to be used in spinning mill that has variable air requirements, provides energy saving and improves the air compressor's service life. There are many air compressor alternatives in the market and conflicting criteria to be considered, so the air compressor selection is a crucial and difficult decision for the company. For selecting the best air compressor for this textile company an integrated method based on MACBETH and COPRAS methods are proposed. The weights of the decision criteria are determined with MACBETH method and then the ranking of the alternatives is determined by COPRAS method. First of all, decision criteria are defined and expressed in the form of a value tree as seen in Figure 2. These criteria are; C 1 Energy consumption (kw/hour per day), C 2 Maintenance cost (Euro per year),
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Case study: company valuation of pt group

Case study: company valuation of pt group

Since the different methods of valuation gave different results, but always near the price quoted on the stock market, one can say that the company seems to be correctly priced. Even though some models showed a slight over-valuation in the market, the stock price has been decreasing since the end of 2013, converging more to the fair price.

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Valuation of Phoenics

Valuation of Phoenics

The main goal of this thesis is to present the Real Option Valuation (henceforth ROV) method and apply it to the case of a start-up as well as to show that this method offers a reasonable alternative to traditional valuation methods for the case of high tech companies. In order to achieve this goal, the theory behind the traditional valuation methods, including the limitations of these in case of high tech companies is discussed. This first step already sheds light on the problems that traditional valuation methods encounter when applied to start-ups. Subsequently, the thesis presents the alternative offered by Real Option Valuation methods, and both techniques are applied to a case of a high tech start-up. In the latter step, it is presented how the traditional valuation methods such as DCF exhibit weaknesses when the company in question has a non- conservative financing structure. As is shown, the problems arising from the DCF become even more severe whenever the company does not provide full accounting information about its financing sources. The lack of reliability of data as well as a nonstandard capital structure of the company is shown to result in a non-trustworthy DCF valuation. This work also shows how ROV can become handy in such a situation.
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Valuation of financial derivatives through transmutation operator methods

Valuation of financial derivatives through transmutation operator methods

rowing the parameter configuration of Kimura (2008, Table 1) and Jeon et al. (2016, Table 1). One can appreciate an excellent agreement of the results produced by the proposed method with those delivered by the RIM and slightly worse agreement with the results produced by the BTM. The latter is due to the fact that even 10000 steps used is insufficient for the BTM to be precise to 4 figures. As for the results from Kimura (2008), there are two concerns. First, the method used in Kimura (2008) is based on the Laplace-Carlson transform and requires the option value to be defined for any t ∈ (0, ∞) and to satisfy an equation similar to (4.37) for any t > 0. That is, a solution should have a continuation across the free boundary satisfying the same initial condition at t = 0. It is not clear why this rather strong assumption holds, and if not, how close is the obtained solution to the exact one. Second, the inversion of the Laplace-Carlson transform was computed by the Gaver-Stehfest method which is rather delicate to implement and can result in relative errors as high as several %, see Kuznetsov (2013) and references therein, no error analysis was presented. Neverthe- less, our results are quite close to those of Kimura.
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Valuation of Dia and food retail industry overview

Valuation of Dia and food retail industry overview

There are several approaches to assess the value of companies. According to Fernández (2007) there are six groups of models for valuing companies which are: balance sheet based methods (book value, adjusted book value, liquidation value and substantial value), income statement based methods (multiples analysis), mixed methods, cash flow discounting methods (DCF, Adjusted Present Value (APV), equity cash flow and capital cash flow), value creation (EVA, economic profit, cash value added and CFROI) and options methods. The author also refers, that the methods that have more importance “… (and are conceptually ‘correct’) are those based on cash flow discounting.” (Fernández, 2007: 1).
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ON THE CASE STUDY: THE RISE OF A MAJOR PLAYER IN THE PORTUGUESE TELECOMMEDIA MARKET

ON THE CASE STUDY: THE RISE OF A MAJOR PLAYER IN THE PORTUGUESE TELECOMMEDIA MARKET

As referred in the Case Study, the valuations of both Zon and Optimus were performed according to the Discounted Cash Flows (“DCF”) method as well as to Market Multiples, namely, EV/EBITDA and EV/[EBITDA-Capex]. The Market Multiples are based on the stock price and capital structure of each comparable company. However, according to the merger ’s Informative Document for the Admission to Trading of the New Shares, available at the regulator CMVM, it was not understood if the Transaction Multiples were considered for valuation purposes.
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COMPANY PERFORMANCE MEASUREMENT AND REPORTING METHODS

COMPANY PERFORMANCE MEASUREMENT AND REPORTING METHODS

The performance of a company implies entwining various types of abilities that characterize the activity of the company, such as: productivity, profitability or competitiveness. From a chronological point of view one may notice that the specialized literature as well as the exercise has emphasized the company’s performance measurement through traditional financial indicators. In the past decade a new methodology of assessing performance at a microeconomic level has emerged and has developed, based on the company’s capacity of creating value in the performed production and sales activity. These indicators that measure the internal and external value of the company (EVA, MVA) have developed as a consequence of the higher demands of the shareholders and of the market as well. As companies perform their activity in a more and more dynamic environment, analysts are more open to non-financial aspects when it comes to reaching certain conclusions concerning the company’s performance.
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Company valuation in a privatization scenario: CTT - Correios de Portugal, S.A.

Company valuation in a privatization scenario: CTT - Correios de Portugal, S.A.

From now on, the objective of this thesis is to determine the fair value of the company using 2 different methods. First of all, it is going to be used the Multiples (or Relative) Valuation approach, which values a company by looking at the market prices of similar firms. Then, the analysis is complemented by using a totally different approach, called Discounted Cash Flow Valuation, that is, as referred further on, the most common approach to find the fair value of a business, and for many experts the most correct one. Nevertheless, it is important to refer that valuing a company, like valuing anything else, is a very individual process that depends on subjective factors like the characteristics of the appraiser (Is he more conservative or less about the future evolution of the company?); the purpose of the valuation (for example, the liquidation value of a company is likely to be lower than the value of the same enterprise on a going concern basis); the economic, social and political context in which the valuation is done; as well as on the valuation method used. Therefore, as presented later on, for the specific case of CTT, the value obtained using different valuation techniques is going to be slightly different, so that the fair value should be somehow in between them.
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D EGREE M ANAGEMENT MBA

D EGREE M ANAGEMENT MBA

Valuation based on the company’s balance sheet represents the original ideal for accounting statements, in which a firm’s income statement would provide a measure of the its earnings potential and its balance sheet would yield a reliable estimate of the firm’s value (Daniels, 1934). Nowadays very few contend that a company’s book value is a good measure of its market value (only good for mature firms with little or no growth opportunities and no potential for excess returns), though some works indicate that if a stock drops below its book value it’s probably undervalued (Graham, 1949) (investing in these stock is called “value investing”, and its potential was corroborated in Fama&French (1992)).
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Astrazeneca and pharmaceutical industry: sector overview and company valuation

Astrazeneca and pharmaceutical industry: sector overview and company valuation

Every industry requires a different valuation approach, in order to get the most accurate valuation results. The pharmaceutical industry, the mining industry and the telecommunication industry, are concrete examples of sectors that need special attention when choosing valuation methods. A great part of these companies assets value comes from Research and Development (R&D), which can lead to new technologies, patents and other intangible assets that can create value to the company or not. Also, a great part of these companies business is based on projects that can create future value for the company or not and the arrival of new information, at every stage of the project, can change its progress. For example, in the pharmaceutical industry, medicines have to be tested in different phases and can fail or succeed in each phase. Depending on the results on each phase the company can continue to invest, abandon or postpone the project. Each of these outcomes should account on the value of the company.
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Valuation of a fintech company: Lending Club

Valuation of a fintech company: Lending Club

According to the credit standing of borrowers, Lending Club fixes the basic interest rate. There are 7 credit levels already presented, as well as 35 sub levels, to evaluate the probability of default at every level. The final interest rate is equal to the sum of the basic interest rate and the credit risk spread. Until now, the average lending interest rate was between 7.54% and 22.58%. What is more, the net capital expenditures changed from $39.4 million (9% of the total net revenue) in 2015 to $44.6 million (8% of the total net revenue) in 2017. The capital expenditures consist of internally developed software, computer equipment, and construction in progress, all of which will continue to enhance the business growth. Based on this information, Lending Club has developed proprietary technology platforms to support businesses. The platform provides analytical tools and data to assist investors to assess their portfolios and make informed business decisions. In addition to this benefit, Lending Club generates revenues from transfer fees based on the platform‘s role in accepting decision applications, investor fees (i.e., servicing fees from investors for various services and management fees from investment funds), gains on sales of whole loans, interest income earned, and fair value gains/losses from loans recorded on the balance sheet
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Columbia Sportswear Company : equity valuation

Columbia Sportswear Company : equity valuation

Firstly, in the literature review it was performed a great research among all valuation perspectives. I note that the most acceptable and consensual model is DCF method. Another model highly recommended by researchers is Relative Valuation since it is simple and straightforward to apply. In this way, Columbia Sportswear’s valuation was based on these two models: DCF, major model, and multiples, crosschecking model. Secondly, acquired industry and company knowledge was essential to estimate future financials and apply the most appropriate valuation methodology. In this line, it is seen for Columbia Sportswear a very optimistic outlook, regarding next years, I believe in continuously growth, through expansion of minor brands and investment in supply chain management. Given this, Columbia Sportswear valuation through DCF model resulted in target price above stock price at 31/12/2014. Also, was applied EV/EBITDA multiple considered the most appropriate to value company’s operations.
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Equity valuation: The Navigator Company

Equity valuation: The Navigator Company

In turn, to entry into new business areas, investments were made. In August 2015, the company initiated the construction of a pellet plant in the United States, South Carolina, which was complete in the third quarter of 2016. This is the first industrial unit outside Portugal. In addition, and on a production basis based on Portugal, the company entered in the Tissue paper business, so in March 2015 the Group announced its Tissue segment through the acquisition of the Sector AMS-BR Star Paper, S.A. - located in Vila Velha de Ródão. Also in 2015, it inaugurated the Viveiro do Luá, in Mozambique, the largest nursery of clonal plants in Africa, which will allow the local creation of Eucalyptus to feed the development of an integrated forestry production project.
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BMW AG : equity valuation

BMW AG : equity valuation

As it has been explained, the concept of valuation is much reliant on estimating key ingredients of firm value, such as Return on Invested Capital (ROIC), growth and WACC, that if misinterpreted can lead to errors in valuation or strategic moves. It is then believed that Multiples can be helpful in creating a fair proxy to such forecasts (Goedhart et al., 2005). Relative Valuation provides an opportunity to value the overall company or its assets upon the similarity to others priced in the market (Damodaran, 2005). It is of course necessary to only take into consideration companies with similar expectations for the key components used. If done right, the valuation can even make one conclude about the expectations of the market or industry the asset is in (Goedhart et al., 2005). Additionally, if markets are pricing assets right, both DCF and Multiples valuation should congregate to the same values. The opposite can happen as well, if the market is overpricing or underpricing assets of a given industry (Damodaran, 2005).
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Increasing Effectiveness of IDS to Improve Security in Intranet

Increasing Effectiveness of IDS to Improve Security in Intranet

A set of configuration schemes must be created based on how the IDS can be configured. It will most likely be a great number of possible configuration parameters available, so each configuration must have a set of parameters either set “on”, “off” or with a fixed value if available. If possible, this configuration scheme may be ported to different IDSs. This is necessary in order to evaluate and compare results from the benchmarks among different IDSs. The experimental scheme can mainly be performed with two computers, one victim host and one attacking host. The victim will run the IDS with several configurations, based on the configuration scheme. For each configuration, the attacker will run the penetration test and then we can discover which attacks that are detected and which are not. The penetration test should also generate some traffic to discover false-positives, alarms that are not real attacks. The proposed experimental scheme can be classified as a qualitative experimental. It seems that an experiment of this kind will give the most valuable results. The main goal is not to test as many IDSs and configurations as possible to get wide statistical data, but rather to discover some key elements in a configuration that makes the IDS behave in a more desired way. Using the proposed qualitative experimental scheme we will get results provided by the configuration scheme that gives output results of: number of false positives and the number of false negatives.
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An indicator for the economic loss in value of damaged cultural heritage properties

An indicator for the economic loss in value of damaged cultural heritage properties

International frameworks and programs for DRR are clear in their objectives of reducing hazard exposure and vulnerability to disasters. Furthermore, the importance of cultural heritage and its irreplaceable value for society is also clearly acknowledged in these objectives. However, how can disaster loss reduction be measured in cultural heritage if there is no reliable loss data on the impacts that disasters have on this sector? Currently, it is clear that existing disaster loss accounting systems underestimate the true cost of disasters as a result of several factors. One of the factors is the inability to account for the disaster impacts on cultural heritage.
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CONTEMPORARY APPROACHES OF COMPANY PERFORMANCE ANALYSIS BASED ON RELEVANT FINANCIAL INFORMATION

CONTEMPORARY APPROACHES OF COMPANY PERFORMANCE ANALYSIS BASED ON RELEVANT FINANCIAL INFORMATION

Profit and loss account - the traditional tool for assessing the company’s performance Most companies have as main objective to maximize the profit, so traditionally the company performance is evaluated based on profit, reflected in the profit and loss account. The profit and loss account gives a retrospective view of the operations that influenced the financial result of the exercise (Moscviciov 2011: 75) and explains the way the result of the exercise is formed as an expression of partial or global adjustments between different types of income and expenses (Mironiuc, 2006: 342). This analysis expresses the firm’s profitability on various levels.
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Business plan of juntta 2.0

Business plan of juntta 2.0

This thesis is a Business Plan of a Peer-to-Peer lending platform, Juntta 2.0, designed for Millennium BCP, to understand the economic viability of entering in this market. The similarities between the type of business of Peer-to-Peer and BCP business activities, makes Peer-to-Peer lending platform the best type of crowdfunding platform for BCP. In Portugal, the crowdfunding market is under-exploit, without many players, yet, which creates comparative advantages, as the new product is more competitive, when comparing to traditional ones. At the same time, it allows Millennium to be prepared to face the new and stronger competition on the market. As a new and risky business, it might have some reluctance from the crowd. After all the considerations, the platform is a value added for the bank, due to its positive Net Present Value (NPV), considering a 5 years’ horizon on estimations.
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Aurora cannabis“high” on valuation?

Aurora cannabis“high” on valuation?

As mentioned before, the firm operates in three distinct segments: Medical, Consumer and Industrial Cannabis. Majority of sales still come from Canadian market (over 90%), while the remaining are mostly driven by European market, the one expected to represent the major driver Aurora´s growth in the next years, The firm currently has three main different product lines: dried cannabis, cannabis extracts and others (e.g. vapers). Dried cannabis is the most recognized form of the substance for all cannabis consumers. Cannabis extracts is a more recent line of business, which includes oils, gels, and other cannabis-derived products. Finally, “others” represent vapers and other products related to the consumption of the substance. Likewise, they can all be used for both medical and recreational pure depending on the dosages of THC and CBD.
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