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Marketability
Business valuation is a process and a set of procedures used to estimate the economic value of an owner's interest in a business. Here various valuation techniques are used by financial market participants to determine the price they are willing to pay or receive to effect a sale of the business. In addition to estimating the selling price of a business, the same valuation tools are often used by business appraisers to resolve disputes related to estate and gift taxation, divorce litigation, allocate business purchase price among business assets, establish a formula for estimating the value of partners' ownership interest for buy-sell agreements, and many other business and legal purposes such as in shareholders deadlock, divorce litigation and estate contest. Specialized business valuation credentials include the Chartered Business Valuator (CBV) offered by the CBV Institute, ASA and CEIV from the American Society of Appraisers, and the CVA by the National Association of Certif ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Valuation (finance)
In finance, valuation is the process of determining the present value (PV) of an asset. In a business context, it is often the hypothetical price that a third party would pay for a given asset. Valuations can be done on assets (for example, investments in marketable securities such as companies' shares and related rights, business enterprises, or intangible assets such as patents, data and trademarks) or on liabilities (e.g., bonds issued by a company). Valuations are needed for many reasons such as investment analysis, capital budgeting, merger and acquisition transactions, financial reporting, taxable events to determine the proper tax liability. Valuation overview Common terms for the value of an asset or liability are market value, fair value, and intrinsic value. The meanings of these terms differ. For instance, when an analyst believes a stock's intrinsic value is greater (or less) than its market price, an analyst makes a "buy" (or "sell") recommendation. Moreov ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Business Valuation Standard
Business Valuation Standards (BVS) are codes of practice that are used in business valuation. Examples of business appraisal standards are as follows: * CICBV Practice Standards. Published by the CBV Institute. * Uniform Standards of Professional Appraisal Practice (USPAP). Standards 9 and 10 cover business valuation and reporting standards. Published by the Appraisal Foundation. * International Valuation Standards. Published by the International Valuation Standards Council. * Statement on Standards for Valuation Services (SSVS No 1). Published by the American Institute of CPAs. In addition, each of the three major United States valuation societies—the American Society of Appraisers The American Society of Appraisers (ASA) is an American nonprofit organization which serves as a professional affiliation of appraisers of all disciplines. The organization is the largest multi-discipline, voluntary membership, trade associatio ... (ASA), American Institute of Certified Publ ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economic Forecasting
Economic forecasting is the process of making predictions about the economy. Forecasts can be carried out at a high level of aggregation—for example for GDP, inflation, unemployment or the fiscal deficit—or at a more disaggregated level, for specific sectors of the economy or even specific firms. Economic forecasting is a measure to find out the future prosperity of a pattern of investment and is the key activity in economic analysis. Many institutions engage in economic forecasting: national governments, banks and central banks, consultants and private sector entities such as think-tanks, companies and international organizations such as the International Monetary Fund, World Bank and the OECD. A broad range of forecasts are collected and compiled b"Consensus Economics" Some forecasts are produced annually, but many are updated more frequently. The economist typically considers risks (i.e., events or conditions that can cause the result to vary from their initial estim ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Option Pricing Approaches
Option or Options may refer to: Computing *Option key, a key on Apple computer keyboards *Option type, a polymorphic data type in programming languages *Command-line option, an optional parameter to a command *OPTIONS, an HTTP request method Literature * ''Options'' (novel), a novel by Robert Sheckley * ''Option'' (car magazine), a Japanese car magazine * ''Option'' (music magazine), a defunct American music magazine Legal rights * Option (aircraft purchasing) * South Tyrol Option Agreement, a forced resettling contract between fascist Italy and Nazi Germany regarding the German-speaking inhabitants of South Tyrol *Option (filmmaking), a contractual agreement between a film producer and a writer, in which the producer obtains the right to buy a screenplay from the writer before a certain date. *Option (finance), an instrument that conveys the right, but not the obligation, to engage in a future transaction (for example, on some underlying security or on a parcel of real pr ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Real Options
Real options valuation, also often termed real options analysis,Adam Borison (Stanford University)''Real Options Analysis: Where are the Emperor's Clothes?'' (ROV or ROA) applies option valuation techniques to capital budgeting decisions.Campbell, R. Harvey''Identifying real options'' Duke University, 2002. A real option itself, is the right—but not the obligation—to undertake certain business initiatives, such as deferring, abandoning, expanding, staging, or contracting a capital investment project. For example, real options valuation could examine the opportunity to invest in the expansion of a firm's factory and the alternative option to sell the factory.Nijssen, E. (2014) Routelegde, 2014. Real options are generally distinguished from conventional financial options in that they are not typically traded as securities, and do not usually involve decisions on an underlying asset that is traded as a financial security. A further distinction is that option holders here, i.e. ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Option (finance)
In finance, an option is a contract which conveys to its owner, the ''holder'', the right, but not the obligation, to buy or sell a specific quantity of an underlying asset or financial instrument, instrument at a specified strike price on or before a specified expiration (options), date, depending on the Option style, style of the option. Options are typically acquired by purchase, as a form of compensation, or as part of a complex financial transaction. Thus, they are also a form of asset and have a Valuation of options, valuation that may depend on a complex relationship between underlying asset price, time until expiration, market volatility, the risk-free rate of interest, and the strike price of the option. Options may be traded between private parties in ''Over-the-counter (finance), over-the-counter'' (OTC) transactions, or they may be exchange-traded in live, public markets in the form of standardized contracts. Definition and application An option is a contract that all ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
First Chicago Method
The First Chicago Method or Venture Capital Method is a business valuation approach used by venture capital and private equity investors that combines elements of both a multiples-based valuation and a discounted cash flow (DCF) valuation approach. The First Chicago Method was first developed by, and consequently named for, the venture capital arm of the First Chicago bank, the predecessor of private equity firms Madison Dearborn Partners and GTCR. It was first discussed academically in 1987. Method The First Chicago Method takes account of payouts to the holder of specific investments in a company through the holding period under various scenarios; see Quantifying uncertainty under Corporate finance. Most often this methodology will involve the construction of: * An "upside case" or "best-case scenario" (often, the business plan submitted) * A "base case" * A "downside" or "worst-case scenario." Once these have been constructed, the valuation proceeds as follows. #First ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Fair Market Value
The fair market value of property is the price at which it would change hands between a willing and informed buyer and seller. The term is used throughout the Internal Revenue Code, as well as in bankruptcy laws, in many state laws, and by several regulatory bodies. In litigation in many jurisdictions in the United States the fair market value is determined at a hearing. In certain jurisdictions, the courts are required to hold fair market hearings, even if the borrowers or the loans guarantors waived their rights to such a hearing in the loan documents. Definition United States The fair market value is the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. ''United States v. Cartwright'', 411 U. S. 546, 93 S. Ct. 1713, 1716-17, 36 L. Ed. 2d 528, 73-1 U.S. Tax Cas. ( CCH) ¶ 12,926 (1973) (quoting from U.S. Treasury regulations rela ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Statements
Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to understand. They typically include four basic financial statements accompanied by a management discussion and analysis: # A balance sheet or statement of financial position, reports on a company's assets, liabilities, and owners equity at a given point in time. # An income statement—or profit and loss report (P&L report), or statement of comprehensive income, or statement of revenue & expense—reports on a company's income, expenses, and profits over a stated period. A profit and loss statement provides information on the operation of the enterprise. These include sales and the various expenses incurred during the stated period. # A statement of changes in equity or statement of equity, or statement of retained earnings, reports o ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Ratio
A financial ratio or accounting ratio is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers within a firm, by current and potential shareholders (owners) of a firm, and by a firm's creditors. Financial analysts use financial ratios to compare the strengths and weaknesses in various companies. If shares in a company are traded in a financial market, the market price of the shares is used in certain financial ratios. Ratios can be expressed as a decimal value, such as 0.10, or given as an equivalent percent value, such as 10%. Some ratios are usually quoted as percentages, especially ratios that are usually or always less than 1, such as earnings yield, while others are usually quoted as decimal numbers, especially ratios that are usually ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Statement Analysis
Financial statement analysis (or just financial analysis) is the process of reviewing and analyzing a company's financial statements to make better economic decisions to earn income in future. These statements include the income statement, balance sheet, statement of cash flows, notes to accounts and a statement of changes in equity (if applicable). Financial statement analysis is a method or process involving specific techniques for evaluating risks, performance, financial health, and future prospects of an organization. It is used by a variety of stakeholders, such as credit and equity investors, the government, the public, and decision-makers within the organization. These stakeholders have different interests and apply a variety of different techniques to meet their needs. For example, equity investors are interested in the long-term earnings power of the organization and perhaps the sustainability and growth of dividend payments. Creditors want to ensure the interest and prin ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
