Types of business enterprise value. Business valuation and its types

Short description

This term paper is the assessment of a 30% stake in OAO Mashservice.
This enterprise was chosen as the object of evaluation due to the dynamic development of the industry. To achieve this goal, the following tasks were set:

As an object of study, a service sector enterprise, namely OJSC "Mashservis", was chosen.

Introduction…………………………………………………………………………..….3

Chapter 1. Methodology for assessing the value of property………………………………..…..5
1.1. The concept of assessing the property complex………………………………………………………………………………………………………………………………………………………………………………………
1.2. Cost approach…………………………………………………………….…8
1.3. Income approach…………………………………………………………..….11
1.4. Comparative approach………………………………………………………..13

Chapter 2. Estimation of the cost of a 30% stake in Mashservice OJSC.....……...…15
2.1. Analysis of the activities of the agency JSC "Mashservice"………………...……15

2.3.4. Coordination of results……………………….…………………………….38

Conclusion……………………………………………………………………….…42

Attached files: 1 file

Ministry of Education and Science of the Russian Federation

Federal State Budgetary Institution of Higher Professional Education

Nizhny Novgorod State University

them. N.I. Lobachevsky

National Research University

Faculty of Management and Entrepreneurship

Department of Economics and entrepreneurial activity

COURSE WORK

discipline: "Evaluation of property in the service sector"

“Valuation of the value of a service sector enterprise for investment purposes on the example of the Mashservice OJSC agency”

Performed:

student gr. 6-EMZ

Sycheva Elena Nikolaevna

____________________

Checked:

st.pr. Sorokin V. A.

____________________

Nizhny Novgorod

Introduction…………………………………………………………………………..….3

Chapter 1. Methodology for assessing the value of property……………………………… ..…..5

1.1. The concept of assessing the property complex……………… ……………………………………………………………………………………………………………………………………………………

1.2. Cost approach…………………………………………………………….…8

1.3. Income approach………………………………………………………….. ….11

1.4. Comparative approach………………………………………………………..13

Chapter 2. Estimation of the cost of a 30% stake in Mashservice OJSC.....……...…15

2.1. Analysis of the activities of the agency JSC "Mashservice"………………...……15

2.2. Analysis of the financial condition of the enterprise……………………………….17

2.3. Valuation of the 30% shareholding………………………………………...…25

2.3.1. Income approach …………………………………………………………...25

2.3.2. Comparative approach ……………………………………………………..30

2.3.3. Amendments……………………………………………………..…..34

2.3.4. Coordination of results……………… ……….………………………….38

Conclusion………………………………………………………………………….…42

References ……………………………………………………………...…43

Introduction

Business occupies a special place among the objects of assessment. When evaluating a business, the object is an activity aimed at making a profit and carried out on the basis of the functioning of the property complex of the enterprise.

Business (enterprise) valuation is one of the main tools in the market of capital transaction support services, which helps the investor to avoid risk. The dynamically developing market for the purchase and sale of enterprises, as well as investment, dictates the need for timely receipt of full information about the object of sale and purchase even at the stage of making a decision to conclude a transaction.

Theoretical knowledge and practical skills in the field of valuation, in our opinion, are a necessary component of the education of an economist, in whatever economic area he works, since they help him to abstract from private operations and present an enterprise as a property complex, a business unit in time, to evaluate the present its position and prospects based on the results of past years.

Business valuation is one of the management analysis tools that allows for forecasting and, consequently, prevention and reduction of the negative impact of crisis situations, and drawing up a business development plan. In a word, a competent assessment of an enterprise contributes to the devaluation of most risks.

The purpose of this course work is to evaluate a 30% stake in OAO Mashservis.

This enterprise was chosen as the object of evaluation due to the dynamic development of the industry. To achieve this goal, the following tasks were set:

analyze the macroeconomic situation in the industry to which the enterprise belongs;
estimate financial condition enterprises;
estimate the value of the company's shares.

As an object of study, a service sector enterprise, namely OJSC "Mashservis", was chosen.

Chapter 1. Methodology for assessing the value of property

1.1. The concept of assessing the property complex

To date, the valuation of property, or property complexes is the most common type appraisal activities, this is due primarily to the breadth of the range of appraisal objects classified as property.

Property is objects of utility that are owned or used by individuals or legal entities. In other words, property is a set of property rights of a particular legal or natural person.

Property complex - a complex of property rights of a legal entity, for all objects involved in the implementation of entrepreneurial activities.

As a result, the valuation of the property complex is the most complete type of valuation, which includes the valuation of real estate, machinery and equipment, vehicles, financial investments, intangible assets, etc. When evaluating a property complex, in addition to evaluating all the components of this property complex, it is necessary to take into account the so-called synergy effect.

Currently, many factors are constantly changing the value of the property. These factors include: the economic crisis, depreciation, changes in property properties, rising and falling real estate prices, and others. All these factors make it much more difficult to obtain up-to-date information on the value of property objects. Property valuation allows you to accurately and accurately determine the value of property in a rapidly changing environment. economic situation in the country.

Today, the valuation of property and property complexes are the most common types of valuation services.

Property appraisal is carried out in the following cases: purchase and sale of property; obtaining a loan secured by property; property insurance; property disputes; contribution of property to the authorized capital; transfer of property for rent; transfer of property to trust management; optimization of enterprise taxes; property registration and tax accounting; assessment of the total value of the organization that owns the property; development of a business plan for the enterprise; making managerial and investment decisions; carrying out the bankruptcy procedure of the enterprise; determining the initial price of property at auction; purchase and sale of an enterprise that owns property; merger or acquisition of an enterprise that owns property; seizure of property for state and municipal needs.

Types of property valuation depend on the purpose of its implementation and are as follows:

1. valuation of property of enterprises and its shares. It is a set of actions, the purpose of which is to establish the value of the company's assets that bring or can bring profit;

2. real estate appraisal. Contributes to the implementation of profitable transactions, the adoption of productive decisions for their implementation;

3. assessment of damage caused to property from natural disasters, floods, fires, illegal actions of persons or government agencies;

4. land valuation. Determining the value of one or more land plots;

5. appraisal of housing (apartments). May include both a full assessment of the value of housing and a share of ownership;

6. evaluation road transport. The process of determining the value of a vehicle on the market at present;

7. evaluation of machinery and equipment. The goal is to determine the real value. Two approaches are used: analogue and assessment at replacement cost, taking into account depreciation.;

8. assessment of damage from a traffic accident.

For each type of property valuation, there are special methods and approaches that allow you to most accurately and reliably determine the value of property.

Property appraisal includes the collection and analysis of data about the object by an expert appraiser to determine the total value, in accordance with this legislation and standards.

Objects of assessment: tangible property: movable, immovable; property rights.

Types of value in property valuation: market value - for the sale of an object; recovery - to create an identical object; investment - to identify promising income.

The totality of cost types gives a complete picture of the real price of the object.

The main stages of property valuation: conclusion of an valuation agreement; determination of property characteristics; analysis of the relevant market; choice of assessment method; carrying out calculations; conclusion of the final cost of the object; preparation of an assessment report

In some cases, the assessment of an enterprise is required by law, in some cases it can contribute to development and accelerate growth, and is carried out on its own initiative.

In any case, the assessment of the enterprise is the task of organizations, and, consequently, of professionals.

A distinction should be made between business valuation and enterprise valuation. An enterprise as a property complex includes all types of property intended for its activities: land plots, equipment, raw materials and products, intangible assets. Estimating the market value of the property complex of an enterprise means determining in monetary terms the value of the enterprise's tangible assets as a set of fixed asset values.

The valuation of the business of an operating enterprise is somewhat different from the valuation of an enterprise as a property complex. This difference is due to the fact that business is a broader concept than a property complex. Business valuation includes determining the value of the company's liabilities and assets: real estate, machinery and equipment, inventory, financial investments, intangible assets. In addition, the performance of the company, its past, present and future income, development prospects and competitive environment in this market. As a result of such an integrated approach, the real value of the business and its ability to make a profit are determined.

In accordance with Russian valuation standards, the procedure for estimating the market value of blocks of shares is carried out using three approaches: costly; comparative; profitable.

Each of these approaches has its own specific methods and techniques. The data used in one approach or another reflects either the present position of the company, or its past achievements, or expected future earnings.

After receiving the results of the assessment for each of the three approaches, the results of the company's market value are agreed upon and the package to be assessed is calculated.

1.2. Cost approach

The cost approach considers the value of the enterprise in terms of costs incurred. The balance sheet value of the assets and liabilities of the enterprise due to inflation, changes in market conditions, accounting methods used does not always correspond to the market value. As a result, the task arises of adjusting the balance sheet of the enterprise. To do this, the fair market value of each asset of the balance sheet is first assessed separately, then the current value of the liabilities is determined, and, finally, the current value of all its liabilities is subtracted from the fair market value of the total assets of the enterprise. The result shows the estimated value equity enterprises.

net asset method. The value of net assets (equity capital) of an enterprise is determined by the formula:

C \u003d A - O (1)

where C is the cost of equity;

A - the market value of all assets;

O is the present value of all liabilities.

Calculation of the cost using the net assets method includes several stages:

1. The real estate of the enterprise is evaluated at market value

2. The market value of machinery and equipment is determined

3. Intangible assets are identified and evaluated.

4. The market value of financial investments, both long-term and short-term, is determined.

5. Inventories are translated into current value.

6. Estimated receivables.

7. Deferred expenses are estimated.

8. Liabilities of the enterprise are translated into current value.

9. The cost of equity capital is determined by subtracting the current value of all liabilities from the fair market value of the sum of assets.

salvage value method. This method is used if it is planned to close the enterprise and sell its assets separately, as well as during the reorganization of the enterprise, the examination of programs for the reorganization of the enterprise, the financing of the reorganization of the enterprise, and the evaluation of applications for the purchase of the enterprise.

Parameter name	Meaning
Article subject:	Cost types
Rubric (thematic category)	Production

Given the dependence on the purpose of the assessment, the number and selection of factors taken into account, the appraiser calculates different kinds cost.

Price- this is the monetary equivalent that the buyer is willing to exchange for any item or object. Cost differs from price and costs.

1. According to the degree of marketability distinguish market value and standard cost.

Under market value in international standards valuation is commonly understood as the estimated value for which the property is expected to change hands on the valuation date as a result of a commercial transaction between a voluntary buyer and a voluntary seller after adequate marketing; it is assumed that each party acted competently, prudently and without coercion. Market price is the most likely price in a transaction between a typical buyer and seller.

In some cases, the market value may be expressed as a negative value. For example, this should be the case in the case of valuation of obsolete properties, the cost of demolition of which exceeds the value of the land, or in the case of valuation of environmentally friendly properties.

Normally calculated cost- this is the value of the property, calculated on the basis of methods and standards approved by the relevant authorities (Goskomimushchestvo, Goskomstat, Roskomzem). In this case, uniform scales of standards are applied. As a rule, the standard calculated value does not coincide with the value of the market value, however, the standards are periodically updated in accordance with the base market value.

2. Evaluation terms distinguish between market, investment, insurance, taxable, salvage value.

When evaluating a property as an object of sale on open market used market price.

When substantiating investment projects calculate the investment cost. Investment cost- the value of property for a particular investor for certain investment purposes.

Unlike market value, which is determined by the behavior of a typical buyer and seller, investment value depends on the individual investment requirements of a particular investor.

There are a number of reasons why investment value may differ from market value. The main reasons are differences: in the assessment of future profitability; in ideas about the degree of risk; in a tax situation; in combination with other objects, owned by the owner or controlled them.

Insurance cost - the value of the property as determined by the terms of the insurance contract or policy.

Taxable value- the cost calculated on the basis of the definitions contained in the relevant normative documents relating to property taxation.

Utilization (scrap) cost- the value of the property (excluding land), considered as the total value of the materials contained in it, without additional repairs.

3. Taking into account the dependence on the nature of the analogue distinguish between the cost of reproduction and the cost of replacement.

cost of reproduction- this is the value of the property, created according to the same layout and from the same materials as the one being assessed, but at current prices.

replacement cost is the cost of a close analogue of the property being valued.

Reproduction cost and replacement cost are widely used in the insurance industry.

4. In accounting Distinguish between book value, residual and replacement value.

Book value- the cost of building or acquiring a property. The balance sheet value is original and replacement. The initial cost is reflected in accounting documents at the time of commissioning. replacement cost- the cost of reproduction of previously created fixed assets in modern conditions; determined in the process of revaluation of basic funds. residual value- ϶ᴛᴏ initial (recovery) minus depreciation.

5. Given the dependence on the development prospects of the enterprise Distinguish between the value of the existing enterprise and the liquidation value.

The value of a going concern- this is the value of the formed enterprise as a whole, and not any of its constituent parts. The value of individual assets or components of a going concern is determined on the basis of their contribution to this business and is perceived as their use value for a particular enterprise and its owner.

Evaluation of an operating enterprise assumes that the business has favorable development prospects, in this regard, one can expect the preservation of the enterprise as a system, and the value of the whole is usually always greater than the simple sum of the costs of individual elements.

Liquidation value, or forced sale value, the amount of money that would realistically have to be received from the sale of a property in a period too short for adequate marketing. When determining it, it is extremely important to take into account all the costs associated with the liquidation of the enterprise, such as commissions, administrative costs of maintaining the operation of the enterprise until its liquidation, expenses for legal and accounting services. The difference between the proceeds that can be obtained from the sale of the company's assets on the market and the cost of liquidation gives the liquidation value of the enterprise.

When assessing the value of an enterprise, there is also such a thing as effective cost. Effective value - the value of assets, equal to the larger of the two values - the use value of assets for a given owner and the cost of their implementation.

Any kind of value calculated by an appraiser is not a historical fact, but an appraisal of a particular property at a given moment in accordance with the chosen purpose.

The economic concept of value expresses a real view of the benefit that the owner of a given object or buyer has at the time of valuation. The basis of the value of any property, incl. business, is its usefulness.

In addition to the concept of ʼʼcostʼʼ, the concepts of ʼʼpriceʼʼ and ʼʼcostsʼʼ (cost price) are used in the theory and practice of valuation.

Price is an indicator of the amount of money required, expected or paid for a certain product or service. It is a historical fact, ᴛ.ᴇ. refers to a particular moment and place. Given the dependence on financial capabilities, motives or special specific interests of the buyer and seller, the price may deviate from the cost.

Cost price is the amount of money required to create or produce a good or service. The cost price will include the totality of costs, costs or expenses. Upon completion of the process of creation or the act of buying and selling, the cost price becomes a historical fact. The price paid by the buyer for the good and service becomes the cost of acquisition for him.

The cost price affects the market value, but it is definitely not defines.

The skillful combination and use of all these concepts make it possible to conduct a qualitative assessment of property objects. Along with the fundamental concepts underlying the transaction, there are also common principles and generally accepted methods of property valuation.

Table. Relationship between the purpose of the valuation and the value elements used for the valuation

Types of value - concept and types. Classification and features of the category "Types of value" 2017, 2018.

- List the main types of value determined in the evaluation of real estate (according to FSO-1.2).

Types of real estate and features of its classification Expand the concept and identify the features of real estate, tell us about the classification of real estate. Real estate includes land and objects that were created on it: buildings, structures, ... .

- Main types of real estate value

Factors Affecting Real Estate Value Real Estate Valuation There are four factors that affect real estate value. 1. Demand - quantity this product or services that find solvent buyers on the market.... .

The market value of the appraisal object (exchange value) is the most probable price at which this appraisal object can be alienated on the open market in a competitive environment, when the parties to the transaction act reasonably, having all the necessary information, and on ... .

- Types of value determined in the evaluation of real estate.

Features of real estate as an object of evaluation. Objects and subjects of assessment. Real estate is a specific commodity circulating in the investment sector. The most significant differences of this product include its economic and physical ... .

- Types of value determined by the benefits from the use of the property

Types of value based on accounting for past costs Replacement cost (costs for full restoration) - costs in current prices that must be incurred when recreating an exact duplicate of this property (using the same ... .

- Evaluation and accounting of fixed assets. Types of cost of fixed assets: initial, replacement, residual, liquidation and average annual.

Depreciable initial cost (Fperv.) - the sum of the costs of construction, purchase, transportation in the prices of the year when they were put into operation. At this cost, the main production assets listed on the balance sheet of the enterprise (first year). F first \u003d C pok ... .

- Regulatory types of value of the appraised object

Economic types value of the appraisal object Principles for formalizing the results of the appraisal Principles reflecting the point of view of the market Principles reflecting the relationship of components ... .

- Types of value of fixed assets

Definition, characteristics and classification of fixed assets Fixed assets and investment activities of the enterprise Fixed assets are labor tools that are reused in manufacturing process, which do not change at the same time ... .

Briefly about the concept of "business"

In our modern lexicon, the word "business" has taken a strong position. But it came into wide use relatively recently - after the Second World War. Before that, such terms as "gesheft", "business", "commerce" were often used.

In the post-Soviet space, this term became widespread after the collapse of Soviet Union in connection with the transition to private property and market relations. This was due to the development of entrepreneurial activity in the countries of the former USSR. Prior to this, entrepreneurial activity was significantly limited by the state. Modern economics gives the following definition of this term:

Definition 1

Business is an entrepreneurial, commercial or other activity that does not contradict the law and is aimed at making a profit by providing consumers with the necessary quality goods and services.

A person who is engaged in business and makes a profit as a result of entrepreneurship is called a businessman.

The scope of business includes manufacturing, banking, consulting, commercial activity, intermediary operations, insurance, etc. At its core, business is an integral part of market relations and market economy. According to the volume and nature of their activities, business is conditionally divided into large, medium and small. AT modern world small business is the most massive. It largely satisfies the petty needs of the people and provides a significant share of the population's employment.

A business may have different organizational and legal norms. They are determined by the current state legislation. In each of these forms, the entrepreneur acquires the status legal entity. According to Civil Code Russian Federation the essence and content of the business is:

meeting the needs of the population in goods and services;
achieving this through the use of property; production and sale of goods, provision of services and performance of work;
the incentive and goal of a businessman is to make a profit;
running your own business (doing business) is the right of any citizen (subject to compliance with the law);
entrepreneurship is exclusively initiative in nature (at the request of a citizen, and not by appointment);
running a business is not a one-time process, but a systematic activity;
risk is an integral part of doing business.

There are the following types of business (spheres of its functioning): manufacturing business, commercial business, financial business. Each of them has its own specifics, reflected in the name. The production finds its realization in the production of material and spiritual goods by various production structures(enterprises). Commercial business is represented by a network of trade institutions through which goods and services are sold and by a set of trade and intermediary organizations. financial business is a separate independent form of commercial business. In it, the goods are national and foreign currency, securities.

The concept of business valuation and its necessity

For the successful conduct of business and an idea of the effectiveness of entrepreneurial activity, a business assessment is carried out.

As a result of the calculations, the value of the market value of the business is formed.

Definition 3

Market value is the most probable price at which a given object can be bought or sold (alienated) in an open market and with all available information.

When determining the value of a business, the following factors must be taken into account:

the amount of income brought by this type of business (enterprises);
the presence and nature of the risks accompanying the receipt of this income;
average market profitability of similar objects;
features of the assessed object (its character traits, structure, state of assets);
the situation in the industry, the market and the economy as a whole.

Evaluation is carried out professional appraisers those with special knowledge and qualifications - representatives of appraisal firms, legal and audit offices, etc.

Types of business valuation

According to the legislation in force in the Russian Federation, the following are subject to assessment:

movable and real estate enterprises and businessmen;
ownership or other rights;
acquisition rights;
debt obligations of the enterprise;
work, services and information and other objects that can be used in civil circulation.

When evaluating a business, activities aimed at making a profit are necessarily taken into account. It is this type of activity that underlies the functioning of the enterprise, its entire property complex. The composition of the property complex of the enterprise includes all types of property of the enterprise and the entrepreneur personally, who participate in economic activity and serve for profit. Therefore, in the course of evaluating the business as a whole, the cost of the entrepreneur's own capital is also determined.

The mandatory types of valuation, in addition to market value, include: investment value (value for certain investment purposes), liquidation value (value in the event of liquidation of an enterprise), cadastral value (value determined by law), collateral value (value of an object as collateral) and rental value (the value on which rental payments are calculated). In order to standardize the business valuation procedure, the following types of valuation are distinguished by the legislation of the Russian Federation: valuation based on the owner's ideas (self-assessment), valuation related to the operation of property and valuation related to market conditions. Each of these types of assessment has its own principles and tools based on certain information and assessment purposes.

From this article you will learn:

What is the value of the company and why is it needed

What are the types of company value?

How to calculate the value of a company

How to quickly calculate the value of a company

What are the features of company value management

How to increase company value

A business exists not only to receive funds for the goods or services for which it was created. Business is also an investment. Many entrepreneurs make money on the organization and launch of new companies with a view to their further sale. Although this is far from the only reason for selling a business. When a firm goes bankrupt or cannot solve its problems on its own, there is often a need to assess the value of the company before selling. In this article, we're going to talk about how to sort out everything related to the cost of your business and avoid difficulties.

Why you need to know the value of the company

Now the vast majority of firms in Russia do not consider the valuation of the company to be something necessary, and their owners often do not see the point in this until the business enters large turnovers and the public arena. Prior to that, the assessment is perceived as a reason for the personal pride of the owner.
The economic goals of calculating the value of the company are actually about twenty, but only three important:

This provides objective data on the state of the business and the effectiveness of the administrative apparatus in it. Reacting to them, the owners can always correct the course in time.
It is impossible to apply for additional cash injections from investors without knowing the true value of the company, otherwise you risk not getting what you came for.
The appraisal makes it possible to correctly and competently take into account the assets that have arisen in the course of economic activity firms.

Of course, valuation is necessary not only for buying or selling ready business. This indicator is important for strategic management company. A clear understanding of the value of your enterprise will also be required when issuing securities, shares and entering the stock market. It is also significant that not a single investor will agree to invest his money where the company's value has not been assessed.
Enterprise business valuation (business valuation)- nothing more than determining the value of the company as non-current and current assets that can bring profit to the owners.

During the appraisal to estimate the value of the company's assets:

real estate,
equipment and machines,
stocks in warehouses,
all intangible assets,
financial investments.

Business is an investment commodity. Any investment in a company is only made with the long-term goal of a return on investment with a profit. Since quite a lot of time passes between investments and income in a business, to determine the real value of a company, a specialist analyzes its activities over a long period and separately evaluates:

past, present and future income,
the efficiency of the entire operation of the enterprise,
business outlook,
market competition.

After receiving these data, the company being valued is compared with other similar firms. Only a comprehensive analysis helps to calculate the real value of the company.

Estimating the value of an enterprise or company- is the process of finding out the maximum probable price of a business as a commodity when it is sold to other owners. At the same time, any enterprise can be sold as a whole or in parts. The company, as the property of its owner, can be insured, bequeathed or used as collateral.

What are the types of company value?

The activity of the appraiser is regulated by the federal standard "Purpose of valuation and types of value"(FSO No. 2), which defines several main types of value of any appraisal object:

Market price.

The market value of the object being valued, for example, a business, is the most probable price at which it can be sold on the day of valuation under the following conditions: the alienation takes place on an open market with existing competition, the participants in the transaction act reasonably and have full information about the subject of the sale, and its value is not affected by any force majeure circumstances.
The market value of the company is needed in the following cases:

when the property of the company or the enterprise itself is seized for state needs;
when the price of outstanding shares is determined, which the company buys by decision of the meeting of shareholders or the supervisory board;
when it is necessary to determine the value of the company acting as collateral, for example, in a mortgage;
when the size of the non-monetary part is determined authorized capital firms;
when the owner goes through bankruptcy proceedings;
when it is required to determine the amount of property received free of charge.

The market value of the company is applied in all situations where tax issues are resolved, both federal and local.
Just this type of value is always determined in transactions for the sale of a business or any part of it, since the market value is the most objective indicator and does not depend on the desires of the participants in the process, it corresponds to the real economic situation.

Investment cost- such a value of the company, which is associated with the profitability of the enterprise for a particular investor in the existing conditions.

This type of value depends on personal investment requirements. Every investor invests in a business in order to make a profit in excess of the amount of invested capital, and not just return this "debt". So the investment value of the company is calculated based on the expected return of the investor and the capitalization rate of these investments. This type the value of the company must be calculated when buying and selling a business, merging, acquiring firms.

Liquidation value.

This cost option is calculated in a situation where the end of the company's work is expected for any reason (for example, reorganization, bankruptcy or division of the company's property). Determining the liquidation value of the company, they find the most probable price at which the company can be sold for the shortest exposure period, provided that the owner of the object of sale is forced to make a deal to alienate his property.

Cadastral value.

This is the market value approved and established by the legislation in the field cadastral valuation real estate. It is to this indicator that mass valuation methods should come in the case of the cadastral value of an object. This type of value is calculated most often for property taxation.

What documents are needed to assess the value of the company

Duplicates or copies constituent documents enterprises.
Documents on the inventory of the company's property.
Written confirmation of the structure of the company and its economic activities.
For joint-stock companies, duplicates of securities issuance reports and copies of prospectuses will be required.
Documentation on fixed assets.
If there is real estate on lease, then copies of the contracts must be submitted.
To assess the value of the company, accounting reports for 3-5 years are required - about all the profits and losses of the business.
Final conclusion audit if it was carried out at the enterprise.
A detailed list of all assets: tangible and intangible, in shares, promissory notes, etc.
Breakdown of accounts receivable and accounts payable.
If the firm has subsidiaries, then it is necessary to collect information about them and submit financial documentation for them.
Ready-made business development plan for the next 3-5 years, containing potential gross revenue, investments, expenses and calculation net profit every following year.

This is a preliminary list of documents that an appraiser will need to conduct an examination of the company's value, but it can be reduced or supplemented at the request of a specialist.

How to find out the value of a company

Obviously, one of the most objective indicators of the performance of an existing business is its cost. It makes it possible to calculate the price at which the enterprise can be sold on the open market in a competitive environment, or to assume the future value of the benefits of the firm. The question of how the valuation of the company is carried out is a serious practical task of high importance for any entrepreneur.
In order to obtain an adequate assessment, it is first of all worth define the main goal costing procedures. The most likely options are:

Determining the value of the company was required to perform some legal actions. In this case, they turn to a licensed independent appraiser, who draws up his opinion in the “Appraisal Report”, regulated federal law № 135.
You need to find out how much your business is really worth in the market, in this situation the official “Valuation Report” is no longer needed.

The fundamental difference in carrying out these procedures is not in the quality of the appraiser's work, but in the cost of services and in the form of a conclusion. In the first case, the specialist is obliged to comply with the requirements of the current legislation governing his licensed activity, and usually these requirements significantly increase the price for the work.
In the second case, you will need to independently develop and clearly formulate a task for the appraiser, listing all the procedures you are interested in, the company's value factors and parts of the business that are subject to examination. So as a result, you will receive only the information that you need.
Business valuation means the calculation of its value as a property complex, which leads to a profit for the owner.
To calculate the value of a company, you need to take into account all its assets, intangible and tangible: real estate, technical equipment, cars, stocks, financial injections. Further, past and potential incomes, plans for the development of the enterprise, competition and the economic environment are necessarily calculated. At the end of a comprehensive examination, the data is compared with information about similar firms, and only after that the real value of the company is formed.
For these calculations, apply three methods:

profitable,
costly,
comparative.

However, in fact, there are so many situations that they are segmented into classes, each of which requires its own approach and corresponding method.
To use the most suitable method calculation, you must first analyze the situation, the circumstances of the moment of assessment and other conditions.
For some types of business, the valuation of the company is carried out, as a rule, based on commercial potential.
For example, in the case of hotel business we deal with guests as a source of income for the company. In a method called profitable, it is this source that will be compared with operating expenses to assess the profitability of the enterprise. This method is based on discounting the profit from renting out the company's property. In conclusion, after the assessment, both the cost of buildings and land are included.
The value of a company is assessed using cost method when it comes to a business that is not subject to sale and purchase, as is the case with government agencies or clinics. This appraisal takes into account the price of construction of the building, depreciation and depreciation of the property.
Comparative method apply when there is a market for such a business. it market method valuation, which is based on the analysis of already sold similar objects in other markets.
Hypothetically, all of the above approaches must give the same value. But in fact, market conditions are not ideal, enterprises are often inefficient, and information is insufficient and imperfect.
Determining the value of the company in each of these approaches allows usage various methods estimates:

For the income approach, these are:

capitalization method, which is used in the case of established companies that managed to accumulate assets in previous periods;
discounted cash flow method for young business which will be developed in the future. Used when a company has a potentially promising product.

The cost approach uses:

method net assets- when it comes to reducing output or closing a business at the initiative of an investor;
and the salvage value method of the company.

For a comparative approach, these are the methods:

transactions, which is used in situations similar to the conditions for applying the net assets method;
industry coefficients, which evaluates operating enterprises that do not plan to close in the period after the examination;
capital market. This method is also intended for "live" companies.

Please note that the last three methods are valid only if there is a similar business that matches the type of the object of assessment, otherwise the analysis will not be indicative. Next, we will briefly talk about the use of these methods, by which the value of the company is calculated.

If you require a cost estimate for the forecast period, it will be determined discounted cash flow method. A discount rate is applied to bring the potential income to the present value.
In this scenario, the calculation of the value of the company is carried out according to the following formula:

P = CFt/(1 + I)^t,

where P- price,
I- discount rate,
CFt- cash flow,
t is the number of the time interval in which the evaluation takes place.
Do not forget to take into account that in the period after the forecast, your company will continue to operate, which means that the future prospects will determine a wide variety of options - from the explosive growth of an enterprise to bankruptcy.
It happens that calculations are carried out using Gordon model, implying a stable and systematic growth in sales and profits of the company, as well as equal volumes of capital investments and depreciation.
For this situation, the following applies. formula:

P = СF (t + 1)/(I− g),

wherein CF(t+1) is the cash flow in the first year following the forecast period,
I- discount rate,
g– flow growth rate.
The Gordon model is most convenient to use when calculating the value of a company if the object of assessment is big business with large market capacity, stable supply, production and sales, located in a favorable economic environment.
If the bankruptcy of the enterprise and the further sale of property are predicted, then this formula is required to calculate the cost:

P = (1 −L cf) × (A-O) -P liq,

where P- company value
P liq– the costs of its liquidation (such as insurance, the services of an appraiser, taxes, employee benefits and management costs),
O– amount of liabilities,
L cf– discount provided in connection with the urgency of liquidation,
BUT- the total value of all assets of the company after their revaluation.
The results of calculations according to the current formula are also affected by the location of the enterprise, the quality of assets, and the situation on the market as a whole.

Quick calculation of the company's value using express valuation

Rapid valuation model, which we will talk about in more detail, is based on the method of discounting the cash flow for the enterprise already known to us. For convenience, we will abbreviate this term as DDP method For the company. These concepts, as we remember, operate in the income approach to the assessment of the company.
This approach is divided into the following most common in it assessment methods:

method of calculating economic profit;
DDP method;
real options method.

According to a lot of information, both direct and indirect, the DCF method is the most adequate in determining the value of a company. Provided that the criterion for the effectiveness and expediency of the method, we choose to display the behavior of the stock market (for example, the capitalization of the enterprise according to its data).
Important, that DDP method has several varieties, corresponding to different purposes and differing in the methods of calculating both the flow itself and the discount rate. We list the most popular varieties:

DCF for equity capital of a joint-stock company (Free Cash Flow to Equity);
discounting DP for the company (Free Cash Flow to Firm);
and another type of cash flow discounting - for capital (Capital Cash Flow);
adjusted present value (Adjusted Present Value).

At the same time, the entire DCF method for an enterprise is based on this formula:

in which indexes i and j the serial numbers of periods (years) are indicated,
EV(Enterprise Value) - the value of the company,
D(Debt) - the cost of short-term and long-term debt,
FCFF stands for "free cash flow for the firm", excluding debt financing left after taxes (or operating cash flow),
E(Equity) is the amount of equity capital of the organization,
WACC(Weighted Average Cost of Capital) is translated as "weighted average cost of capital", which is calculated as follows:

rd- the cost of the company's capital, which is borrowed,
t- income tax rate,
r e- the amount of equity capital.
When calculating the value of companies in Russia, often the following simplifications are introduced:

Weighted average cost of capital WACC can be referred to as the discount rate - r. This move does not destroy the adequacy of the formulas, since for business in Russia, the calculation WACC is not always possible. Because of this, analysts resort to other calculation options.
And let's say that the variable r is constant throughout the years. This is because the definition this indicator in Russia, even for one particular year, it causes big problems and leads to a methodological stupor. So, if we do not introduce such a simplification, then we will unnecessarily complicate the entire model of express valuation of the company's value.

As a result of all the above transformations we get the expression kind

Company value factors within the described valuation model are any scalar values and vectors that affect the value of the enterprise in the calculations.
Note that forecasting a firm's free cash flow for each year of an infinitely long period is difficult and makes little sense. This happens because the value of the terms with the index i too small due to the denominator, and the imperfect calculation of the numerator has almost no effect on the final result of this calculation. For this reason, the following popular practical an approach:

the value of the company is divided into the forecast period and the post-forecast period;
in the first period, cost factors are predicted based on assumptions and plans for the further development of the enterprise;
in the post-forecast period of time, cash flows are estimated based on the hypothesis of a fixed rate of their growth throughout the entire period.

Company valuation: typical mistakes

Everyone who has dealt with valuation services is well aware that the way they are calculated has a significant impact on the market value of the same business being valued. The resulting amounts may vary by several times. Such results often lead to serious financial damage, conflicts and even litigation.
Let's call several main reasons for the variation in the value of the appraised object:

methodological errors.

Inadequate value is obtained as a result of errors in the calculation, as well as due to methodological inconsistencies in assessing the value of the company. Carefully study the experience and professional level of the appraiser.

Deliberate misrepresentation of value.

Unfortunately, to this day, a certain share of the market for services for the evaluation of various objects is occupied by "custom" examinations. That is, the real cost can be underestimated or overestimated in the expert's opinion at the request of the customer.

subjective expert opinion.

Although the estimation procedure is based on specific values and economically sound assumptions, in many respects this process remains subjective. So the result may depend on the appraiser's personal view of the future of the market, financial opportunities and other factors of the company's value. The decision on how to deal with economic conditions is up to the analyst doing the analysis. And not always he will be able to predict even the most seemingly predictable things. Judge for yourself: who could predict the development of the oil market two or three years ago at $66 per barrel, and not at $25 or even the optimistic $30 per unit?

Wrong assignment.

The amount of the final cost that will be obtained as a result complex analysis and calculations, largely depends on the correct formulation of the problem, on the accuracy and adequacy of the choice of the type of cost, and on the ultimate goals for which the entire procedure is carried out. It is not surprising that the same security can be valued by amounts that differ by 20 or even 50%. This is influenced, for example, by whether it is in a minority or a controlling stake. Depending on the purpose of determining the value of the company, the calculation process is carried out in different ways.

Distortion of official reporting.

The management of some enterprises deliberately goes for a discrepancy between real and official reporting. And the distortion of this factor of the company's value inevitably leads to incorrect valuation results. This problem is even more aggravated in the case when it is necessary to make a settlement for the business, the share of which is pledged upon receipt of credit funds. Banks prefer not to work with management reporting, but only with official ones, which significantly changes the assessment indicators.

Legislation flaws.

Today, experts in the field of valuation refer to three main methods of this procedure - costly, profitable and comparative. The official evaluation standards state that the final calculation must take into account the results obtained in all three approaches. But these methods do not always correspond to the objectives of the examination.
List of factors to consider, in order to clarify their meaning and get comments from an expert conducting a company valuation:

The cash flow forecast based on the results of the analysis, and the discount rate that reflects the cost of raising third-party capital, - with an income approach.
The cost of all intangible assets (including those that are not included in this category in accordance with the legislation of the Russian Federation) - with a cost approach.
The adequacy of the multipliers (price ratios) and the comparability of the company-analogue with which the comparison is being made - with a comparative approach.

The chapter provides the concept of enterprise value, names the types of value determined in the assessment, the factors that determine the cost, and the principles that should be followed when assessing a business. The algorithm of the assessment and the preparation of the assessment report are considered in detail. Listed some features foreign experience business valuations.

Appraisal activity consists in obtaining an idea of the value of the object of appraisal or the size of the owner's share at a particular point in time.

A business can be valued differently depending on the purpose of the valuation and the circumstances. Therefore, an accurate determination of the value is required for valuation.

In accordance with the Valuation Standards approved by Decree of the Government of the Russian Federation No. 519 dated July 6, 2001, the following types of value are currently approved.

1. Market value. “Market value is the most probable price at which this object can be alienated on the open market in a competitive environment, when the parties act reasonably, having all the necessary information, and any extraordinary circumstances are not reflected in the value of the transaction, i.e. when:

♦ one of the parties to the transaction is not obliged to alienate the object of evaluation, and the other party is not obliged to accept the execution;

♦ the parties to the transaction are well aware of the subject of the transaction and act in their own interests^

♦ the object of assessment is presented on the open market in the form of a public offer;

♦ the price of the transaction is a reasonable remuneration for the object of evaluation and there was no coercion to make a transaction in relation to the parties to the transaction from anyone;

♦ payment for the appraisal object is expressed in monetary terms” .

This type of value is applied to all issues related to federal and local taxes. Imenenko, the market value is determined when evaluating for the purpose of buying and selling an enterprise or part of its assets.

The market value is objective, independent of the desire of individual participants in the real estate market and reflects the real economic conditions emerging in this market.

2. Types of the value of the appraisal object, other than the market value:

♦ value of the appraisal object with a limited market - the value of the appraisal object, the sale of which on the open market is impossible or requires additional costs in comparison with the costs necessary for the sale of goods freely circulating on the market;

♦ the cost of replacing the appraised object - the sum of the costs of creating an object similar to the appraised object, in market prices existing on the date of the appraisal, taking into account the depreciation of the appraised object. This type of value is widely used in the insurance industry;

♦ cost of reproduction of the appraised object - the sum of costs in market prices existing on the date of the appraisal, for the creation of an object identical to the appraised object, using identical materials and technologies, taking into account the depreciation of the appraised object. In this case, the same obsolescence of the object and the same shortcomings in architectural solutions are reproduced that the evaluated object had. It does not take into account only physical deterioration;

♦ value of the appraisal object in the current use - the cost of the appraisal object, determined on the basis of existing conditions and purposes of its use;

♦ investment value of the appraisal object - the value of the appraisal object, determined on the basis of its profitability for a particular person with given investment goals. The investment value is determined based on individual investment requirements.

A typical investor, investing in a business, seeks to receive, along with a return on invested capital, also a return on invested capital. Therefore, the calculation of the investment value is made on the basis of the expected income data of the investor and specific rate their capitalization. Investment value is the starting point for negotiations on sales transactions, acquisitions, mergers, etc.;

♦ value of the appraisal object for taxation purposes - the cost of the appraisal object, determined for the calculation of the tax base and calculated in accordance with the provisions of regulatory legal acts (including the inventory value);

♦ salvage value of the appraisal - the value of the appraised object in case the appraised object should be alienated within a period less than the usual period of exposition of similar objects. Distinguish between orderly and forced liquidation. An orderly liquidation is carried out for a period of time sufficient to obtain a maximum price. Forced liquidation means the most urgent possible sale of assets. Naturally, it gives a lower cost. In case of any liquidation, the costs of liquidation are taken into account (commissions for sale agents, expenses for maintaining the administration of the liquidated enterprise, etc.). Western practice shows that the liquidation value of the firm as a whole is less than the amount of proceeds from the sale of its assets;

♦ Disposal value of the appraised object - the value of the appraised object equal to the market value of the materials it includes, taking into account the cost of disposing of the appraised object;

♦ special value of the object of appraisal - the value, for the definition of which in the appraisal agreement or normative legal act conditions are stipulated that are not included in the concept of market or other value specified in these valuation standards.

It should be noted that with the introduction of the above standards, problems arose due to the contradiction and internal inconsistency of various legislative acts. For example: client appraisal company - construction company from Kamchatka - requested a market assessment of its shares with a view to buying them back from its minority shareholders. Market conditions are such that under no circumstances can the concept of "market value" be applicable. Taking into account all external and internal restrictions, the most adequate type of value in accordance with the new valuation standards is the cost in a limited market. However, the Law on joint-stock companies”, enacted in 1995, and all its subsequent editions prescribe in all such situations to determine exactly the market value, and not any other. Of the two conflicting regulations - the Law "On Joint-Stock Companies" and the "Standards for Valuation Activities" - the first has a higher priority (since it is a law, and not a by-law, which is the "Standards"), and therefore it is always applied in practice evaluation if needed.