Assessing the Value of the Enterprise: Methods and Instruments
International Journal of Economics, Commerce and Management, Vol. IV, Issue 7, July 2016, ISSN 2348 0386
10 Pages Posted: 18 Jul 2016
Date Written: July 2016
Making the right investment decisions regarding sale and purchase of the company, or joining of any other enterprise, it is necessary that the decisions in question has to be taken based on the assessment of the value of the enterprise. Assessing the value of the enterprise must be in accordance with recommendations of the International Standards value assessment of the enterprise. Enterprise value evaluators must conduct the assessment, in accordance with basic principles: assessment of the enterprise as general economic and that assessment cannot be made based on the results achieved, but on the basis of expected results. In this paper will be discussed modern methods of assessing the value of the target company, and that in: assetbased methods, methods based on the economic value and combined methods. Many investments are made based on a detailed investigation and organizational Value Evaluation. As reviled in the study, the disadvantage of methods based on the accounting value is static approach. It disregards the principle of generating value for the owner of the purchasing enterprise, respectively, for merger. Hence, they are not without shortcomings. The main issue with them is the difficulties to provide the initial offering price. Rather, they provide oriented information regarding the creative potential of the future values.
Keywords: Enterprise value, enterprise assessment, evaluation methods, principles of assessment, economic value, market value, predictive enterprise value
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