View this article in RussianIn modern conditions it is important to know the value of your business, as this is the basis for determining the direction by which the business is moving. The cost of the business allows any user to determine the effectiveness of the business owner for a certain period of time.
Business as a broad concept includes any kind of entrepreneurial activity. This includes any enterprise, or a company that has its own owner, and which derives profit from the implementation of its business or company activities.
According to Nikolsy Chebotarev, the value of an enterprise (business) is the value of the entire property complex of a functioning enterprise (or operating business) as a whole.
According to Alexander Asaul the purposes of valuation of the enterprise value can be grouped into five blocks:
1) assessment of the value of the enterprise to improve management efficiency, determine the value of securities, determine the creditworthiness of the enterprise, develop a production development plan, optimize taxation, implement the investment project;
2) evaluation of the cost of development of real estate objects of the enterprise (sale of land and construction sites, obtaining a loan secured by real estate, etc.);
3) evaluation of the value of the development of the movable property of the enterprise (for sale, for leasing);
4) valuation of intangible assets (know-how, goodwill);
5) evaluation of the company’s debts (formation of the debt market, which allows the company to sell overdue debts at public auctions, increase the capital turnover) [1 , p.15].
It is known that the reasons for the sale of enterprises may be its insolvency, liquidation, bankruptcy, the owner’s need for money, forced sale of the enterprise. In such transactions, the role of the buyer is performed by entrepreneurs of various forms of ownership.
According to Nikolay Chebotarev, the enterprise as a property complex includes all types of property that are intended to carry out its activities (land plots, equipment, inventory, raw materials and materials, buildings, structures, etc.) [2, p.11].
The cost of an enterprise (business) is a component of a subjective characteristic. The determination of the value of the enterprise (business) is handled by such specialists as appraisers. They have all the necessary tools for determining the value and making an assessment of the value of the enterprise or business as a whole.
Relations with such specialists are based on mutual agreement, which is fixed in a special agreement.
As you know, two persons are involved in the acquisition of an enterprise (business) – a buyer and a seller.
According to Alexander Asaul participating in the transaction, the buyer analyzes the possible development of the production situation associated with the acquisition of the enterprise.Its primary task is to determine the magnitude of future profits. This can be done by analyzing the situation on the market and realizing what place in the market the company of interest is interested in. Even before the purchase of the enterprise, the buyer determines whether production is at the peak of development or whether it has the potential for development [3, p.13].
The cost of an enterprise can be influenced by various factors, such as:
1) microeconomic (all terms of contracts – subject, duration, rights and obligations of the parties, etc.);
2) macroeconomic (inflation rate, unemployment rate, fluctuations in the national currency rate, etc.);
3) factors that affect the speed of the market turnover of an enterprise (the number of enterprises that carry out similar activities, infrastructure development, legal support of activities, etc.).
It should be noted that the value of the enterprise is a calculated indicator.
Thus, we gave a definition of the value of the enterprise (business) and examined the essence of the value of the enterprise. Now we turn to the methods of valuation of the enterprise.
In modern conditions it is important to know the value of your business, as this is the basis for determining the direction by which the business is moving. The cost of the business allows any user to determine the effectiveness of the business owner for a certain period of time.
Business as a broad concept includes any kind of entrepreneurial activity. This includes any enterprise, or a company that has its own owner, and which derives profit from the implementation of its business or company activities.
According to Nikolay Chebotare, the value of an enterprise (business) is the value of the entire property complex of a functioning enterprise (or operating business) as a single entity [4].
According to Alexander Asaul the purposes of valuation of the enterprise value can be grouped into five blocks:
1) assessment of the value of the enterprise to improve management efficiency, determine the value of securities, determine the creditworthiness of the enterprise, develop a production development plan, optimize taxation, implement the investment project;
2) evaluation of the cost of development of real estate objects of the enterprise (sale of land and construction sites, obtaining a loan secured by real estate, etc.);
3) evaluation of the value of the development of the movable property of the enterprise (for sale, for leasing);
4) valuation of intangible assets (know-how, goodwill);
5) evaluation of the company’s debts (formation of the debt market, which allows the company to sell overdue debts at public auctions, increase the capital turnover) [4].
It is known that the reasons for the sale of enterprises may be its insolvency, liquidation, bankruptcy, the owner’s need for money, forced sale of the enterprise. In such transactions, the role of the buyer is performed by entrepreneurs of various forms of ownership.
According to Nikolay Chebotarev, the enterprise as a property complex includes all types of property that are intended to carry out its activities (land plots, equipment, inventory, raw materials and materials, buildings, structures, etc.) [4].
The cost of an enterprise (business) is a component of a subjective characteristic. The determination of the value of the enterprise (business) is handled by such specialists as appraisers. They have all the necessary tools for determining the value and making an assessment of the value of the enterprise or business as a whole.
Relations with such specialists are based on mutual agreement, which is fixed in a special agreement.
As you know, two persons are involved in the acquisition of an enterprise (business) – a buyer and a seller.
According to Alexander Asaul participating in the transaction, the buyer analyzes the possible development of the production situation associated with the acquisition of the enterprise.Its primary task is to determine the magnitude of future profits. This can be done by analyzing the situation on the market and realizing what place in the market the company of interest is interested in. Even before the purchase of the enterprise, the buyer determines whether production is at the peak of development or whether it has the potential for development.
The cost of an enterprise can be influenced by various factors, such as:
1) microeconomic (all terms of contracts – subject, duration, rights and obligations of the parties, etc.);
2) macroeconomic (inflation rate, unemployment rate, fluctuations in the national currency rate, etc.);
3) factors that affect the speed of the market turnover of an enterprise (the number of enterprises that carry out similar activities, infrastructure development, legal support of activities, etc.).
It should be noted that the value of the enterprise is a calculated indicator.
Thus, we gave a definition of the value of the enterprise (business) and examined the essence of the value of the enterprise. Now we turn to the methods of valuation of the enterprise.
References
- E.V.Sokolov Forecasting and valuation of the enterprise’s value [Electronic resource]: textbook / E.V. Sokolov, A.V.Pilyugina – Moscow: Moscow State Technical University named after N.E. Bauman, 2014.- 88 c.
- A.N.Fomenko Liquidation value: features and methods of calculation // Valuation questions. – 2015. – No. 1 (79). – P. 2-12.
- N.F. Chebotarev Estimation of enterprise (business) value [Electronic resource]: textbook / N.F. Chebotarev. – 3rd ed. – Moscow: Dashkov and Co., 2015. – 252 p.
- Anghel, Ion, and Costin Ciora .Valuation standards around the world // In the 19th century, the European Real Estate Society Conference. – 2012. – pp. 13.
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