Business and securities

When determining the market value of the business, a retrospective analysis of financial and economic activities of the company is carried out for at least three preceding years.

Based on this analysis and taking into account long-term plans of the company development within the framework of income approach the future monetary flow is planned for the forecast period, and the current value of this monetary flow together with the company value in post-forecast period will amount to the value of business determined by the income approach.

Under the cost approach the analysis and adjustment of both right-hand and left-hand items of the nearest to the appraisal date balance sheet for the amount of their market value. The value under the cost approach is calculated by the net asset method taking into account the above mentioned adjustments.

The comparative approach focuses on selection of companies similar to the one being appraised and identifying differences in their financial and economic performance. Then multipliers are calculated, which relate the company value to its basic performance figures, such as proceeds, net profit, profit before tax, etc.

Then each value obtained under a separate approach is assigned a weighting coefficient based on its meaningfulness, trustworthiness and influence on the final result, then final adjustments are introduced and the market value of the business is determined.

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