valuation

Examples of valuation in the following topics:

• Valuation

  • Valuation, a goal of financial management, often relies on fundamental analysis of financial statements.
  • There are several goals of financial management, one of which is valuation .
  • In finance, valuation is the process of estimating what something is worth.
  • Valuation is used to determine the price financial market participants are willing to pay or receive to buy or sell a business.
  • Valuation is, for some, one of the goals of financial management.

• Valuing the Target and Setting the Price

  • This valuation process is referred to as due diligence.
  • It is essential that the concepts of valuations (shareholder value analysis) be linked into a due diligence process.
  • The five most common methods of valuation are:
  • As synergy plays a large role in the valuation of acquisitions, it is paramount to get the value of synergies right.
  • Synergies are different from the "sales price" valuation of the firm, as they will accrue to the buyer.

• Valuation of Intangible Assets

  • The valuation of intangible assets are primarily derived from transactions involving intangible assets.
  • Valuation models can be used to value intangible assets such as patents, copyrights, software, trade secrets, and customer relationships.
  • As a result, present value models or estimating of the cost to recreate an intangible asset are often used to is these valuations.
  • The valuation of intangible assets with identifiable useful lives such as patents, trademarks, and copyrights are initially valued at acquisition costs.
  • From an accounting perspective, intangible asset valuation is primarily derived from acquisition costs.

• Impacts of Costing Methods on Financial Statements

  • The method a company uses to determine it cost of inventory (inventory valuation) directly impacts the financial statements.
  • The method a company uses to determine it cost of inventory (inventory valuation) directly impacts the financial statements.
  • Without inflation, all three inventory valuation methods would produce the same results.
  • The inventory valuation method a company chooses directly effects its financial statements.
  • Differentiate between the FIFO, LIFO and Average Cost inventory valuation methods

• Understanding Future Stock Value

  • There are many different ways to appraise the future value of stocks, including fundamental criteria and stock valuation methods.
  • In financial markets, stock valuation involves calculating theoretical values of companies and their stocks.
  • The main use of stock valuation is to predict future market prices and profit from price changes.
  • This valuation technique has become more popular over the past decade or so.
  • This valuation technique measures how much money the company makes each year per dollar of invested capital.

• Expected Dividends and Constant Growth

  • Valuations rely heavily on the expected growth rate of a company; past growth rate of sales and income provide insight into future growth.
  • Valuations rely very heavily on the expected growth rate of a company.
  • And for any valuation technique, it's important to look at a range of forecast values.
  • Nonetheless, the growth rate method of valuations relies heavily on gut feel to make a forecast.
  • The valuation is given by the formula:

• Valuing the Corporation

  • Three approaches are commonly used in corporation valuation: the income approach, the asset-based approach, and the market approach.
  • Corporation valuation is a process and a set of procedures used to estimate the economic value of an owner's interest in a business.
  • The Capital Asset Pricing Model (CAPM) is one method of determining the appropriate discount rate in business valuations.
  • That is the theory underlying the asset-based approaches to business valuation.
  • Distinguish between the income, asset-based, and market approaches for corporate valuation

• What is Economics?

  • Warren Samuels argues that the "economy is a process of valuation….
  • That to behave and to choose is to engage in valuation and thereby to participate in the social, or socioeconomic, valuation process" (Samuels p ix).
  • He goes on to point out that "the economy encompasses more than the market… and "that other nonmarket valuational processes exist" [ibid p 16].
  • Some of the other valuation processes are effort, desire and tradition.
  • Valuation is the process by which individuals assign worth, merit or importance to a phenomenon (good or event).

• Objectives

  • This process necessarily requires a subjective valuation or ranking of alternative states or conditions.
  • To repeat from above, Warren Samuels argues that the "economy is a process of valuation….
  • That to behave and to choose is to engage in valuation and thereby to participate in the social, or socioeconomic, valuation process" (Samuels p ix).
  • He goes on to point out that, "the economy encompasses more than the market… and "that other non-market valuational processes exist. " These valuational processes are used to choose among competing ends, or objectives.

• Pricing a Security

  • It is the result of the valuation of the asset .
  • In finance, valuation is the process of estimating what something is worth.
  • There are different valuation methods.
  • The observed prices serve as valuation benchmarks.
  • Financial professionals make their own estimates of the valuations of assets or liabilities that they are interested in.