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¶ … valuing a business, including asset-based approaches, earnings-based approaches and market value approaches (Ward, 2016). Asset-based approaches views the business as its net asset base, but this can be inaccurate because the valuation of the assets on the balance sheet might be stale-dated. Valuation on a liquidation basis only makes sense if the business is to be liquidated; if it is a going concern, then it is probably worth more than liquidation value on those assets.
The market-based approach looks at what other similar businesses have sold for. There are a couple of drawbacks to this approach. First, you have to choose a similar company that has recently sold. There might not be any. Further, the choice of "similar company" might not actually be that similarity. There might be material differences in your corollary that render the comparison inaccurate.
The earnings-based approach is rooted in the idea that a business is worth the present value of its expected future cash flows. This method is usually the most accurate, especially if the business has relatively stable cash flows and there are no material changes in the environmental outlook. Further, this method can be valuable when the business is being taken over -- the seller can use this method to determine what the actual value of the business is to the potential buyer, which might be higher than its value to...
In such a situation, past cash flows are a poor indicator of future cash flows. Say a small business loses a key partner, and the remaining partner is now looking to sell. But if that key partner who left was the real driver of the business, then what is now being sold will be short two key partners -- it will not be the same business going forward than it was in the past. That might be a situation where the asset-based approach works best. But in the majority of situations, the earnings-based approach to valuation makes the most sense.
2. When you don't know a firm's specific details, it is not possible to render an opinion on whether GAAP or IFRS would be more favorable. The reality is that this is something you calculate when you have hard numbers -- math is how you answer a question like this, not opinion. I personally prefer GAAP, as I am more comfortable with it, and I feel that the statements have greater clarity. IFRS statements are not as well organized. I also prefer GAAP's rule-based approach because as an external stakeholder you always know the basis for how something was calculated. I have a preference for hard facts and clear logic, and feel that IFRS is entirely to fuzzy in that regard -- principles are not as reliable as…
References
Heakal, R. (2014) What is market efficiency? Investopedia Retrieved December 3, 2016 from http://www.investopedia.com/articles/02/101502.asp
No author (2016) Differences between GAAP and IFRS and implications of potential convergence. Boundless.com Retrieved December 3, 2016 from https://www.boundless.com/accounting/textbooks/boundless-accounting-textbook/introduction-to-accounting-1/conventions-and-standards-21/differences-between-gaap-and-ifrs-and-implications-of-potential-convergence-131-7049/
Radcliffe, B. (2015) The basics of tariffs and trade barriers. Investopedia. Retrieved December 3, 2016 from http://www.investopedia.com/articles/economics/08/tariff-trade-barrier-basics.asp
Ward, S. (2016) 3 business valuation methods. The Balance. Retrieved December 3, 2016 from https://www.thebalance.com/business-valuation-methods-2948478
Naturally, this improves profitability for private enterprises but simultaneously shrinks the American production and labor economies. This is the type of stifling of growth that has contributed significantly to the current state of recession gripping the United States. Globalization makes as its underlying presumption the assertion that by reducing barriers to economic integration across international borders, the world community is creating a vehicle to a more equal distribution of wealth.
Excess Stock Returns The author of this report has been charged with doing a brief literature review and then answering two basic questions. The first question is whether the empirical evidence available leads to a predictability of stock returns using technical analysis. The second question asks the author to critically evaluate whether return predictability is a good indicator and test of market efficiency. While some people can get rich in the
organizations customer markets fundamental business models • In a 3- 5-page paper, apply framework -market analysis (external labor markets, internal labor markets, capital markets, customer markets) conduct a compensation strategy analysis competitive landscape organizations • In addition, organization, highly influential, large population job organization apply question, "What economic difference organization performance job, poor, mediocre outstanding?" Post a multiple market analysis. Competitive Landscape Analysis on Three Companies Coca Cola Competitive Landscape Analysis External
Market Efficiency and Empirical Approaches to Test for it A review and discussion of market efficiency A financial market is efficient with respect to information item, if the new information has fully influenced the market prices. In an efficient market, when a new information is made available its impact is said to be instantaneous or rapid and unbiased to the financial assets' current market prices. There are three different hypotheses that have
As part of the research triangle, Raleigh has a significant portion of its population that fits the target market. For the Farmery to succeed, it only needs to capture a small portion of the market share. This is especially true because the store has a small footprint, and has the flexibility to set up on vacant lots without the costs of either renting or developing fixed real estate. The
0 technologies ((Wirtz, Schilke, Ullrich, 2010) Heavily reliant on a broad range of integration points throughout an enterprise, creating a real-time information network using collaboration technologies including Facebook-like applications (Salesforce.com Chatter) Comparable in design objectives to the structure of the knowedlge-sharing ecosystem; yet this business model is based on real-time social media data and collaboration Ideal for large, knowledge-based businesses that are growing rapidly; perfect fit for new business ventures based on consulting