Valoración de empresas estacionales por descuento de flujos (How to Value a Seasonal Company Discounting Cash Flows)

13 Pages Posted: 20 Apr 2009 Last revised: 16 May 2015

Pablo Fernandez

University of Navarra - IESE Business School

Date Written: April 15, 2013

Abstract

Spanish Abstract: Se pueden valorar empresas estacionales por descuento de flujos utilizando datos anuales, pero éstos requieren algunos ajustes. La forma correcta de valorarlas es utilizando datos mensuales. Los errores debidos a la utilización de datos anuales sin ajustar son grandes. Utilizar la deuda media y las NOF medias no proporciona una buena aproximación al valor de la empresa.

English Abstract: The correct way of valuing seasonal companies by cash flow discounting is to use monthly data. We may use annual data, but it requires some adjustments. To adjust only by using average debt and average working capital requirements does not provide a good approximation.

This paper values a company in which the seasonality is due to the purchases of raw materials: the company buys and pays all raw materials in the moth of December. We show that the equity value calculated using annual data without doing the adjustments understates the true value in a 45% if the valuation is done at the end of December, and overstates the true value in a 38% if the valuation is done at the end of November. The error of adjusting only by using average debt and average working capital requirements ranges from -17.9% to 8.5%.

Notes: Downloadable document is in Spanish.

Keywords: Cash flow, seasonal companies, monthly data

JEL Classification: G12, G31, M21

Suggested Citation

Fernandez, Pablo, Valoración de empresas estacionales por descuento de flujos (How to Value a Seasonal Company Discounting Cash Flows) (April 15, 2013). Available at SSRN: https://ssrn.com/abstract=1392146 or http://dx.doi.org/10.2139/ssrn.1392146

Pablo Fernandez (Contact Author)

University of Navarra - IESE Business School ( email )

Camino del Cerro del Aguila 3
28023 Madrid
Spain
+34 91 357 0809 (Phone)
+34 91 357 2913 (Fax)

HOME PAGE: http://web.iese.edu/PabloFernandez/

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