No abstract

Intangible assets, including inherent goodwill, form an increasingly significant part of company value. However, the standard methods used for their valuation are assumed to apply only in the case of publicly traded companies. Therefore, these methods are not applicable to most companies in the Czech Republic, where valuers must contend mostly with closely held private companies, with limited or sub-standard empirical data and with Czech accounting standards (historical cost approach rather than fair value accounting) (Strouhal et al., European Financial and Accounting Journal, 2011).This paper presents the methodology for understanding the various components which make up inherent goodwill in companies whose owners are highly involved in the management of company operations and activities. The valuation of goodwill in these specific conditions was also discussed by Kliestik et al. (Polish Journal of Management Studies, 2018).The basic methodological approach used within this paper is income valuation. A company generates inherent goodwill if the return on net invested capital (RONIC) exceeds the weighted average cost of capital (WACC). Inherent goodwill is the difference between the income-based value of the company and the real value of the assets. Income-based valuation involves the analysis and forecasting of value drivers, including revenues and associated growth, profit margin, investments in longterm operational assets and in operating working capital (i.e., invested capital), the

Road transportation is responsible for a significant part of the EU’s total CO2 emissions. Therefore, the automotive sector is subject to continuously strengthening environmental regulation. Regulation (EU) 2019/631 of the European Parliament and of the Council of 17th April 2019 sets, for the period from 2020 to 2024, an EU fleet-wide target of 147 g CO2/km for the average emissions of new light commercial vehicles and an EU fleet-wide target of 95 g CO2/km for the average emissions of new passenger cars, phasing in for 95% of vehicles in 2020 with 100% compliance in 2021. If a manufacturer does not meet given CO2 standards, the excess emissions premium (penalty) is to be charged. Value creation in the automotive sector across the supply chain is necessarily undergoing a process of change. Manufacturers of passenger cars and light commercial vehicles are forced either to face a massive penalty or to invest in the development of low-emission technology and in the change of the production portfolio towards zero- and low-emission vehicles with lower profit margins and a relatively unformed customer base. The aim of this paper is to identify how the excess emissions premium affects the value creation in the automotive industry. Our methodology utilizes the income-based valuation approach. First, we conduct an analysis of the key financial value drivers of automotive companies in the period from 2016 to 2019. Subsequently, we make a prognosis of value drivers for the future period affected by the above-mentioned regulation.

No abstract

By using a case study of a fictional corporation, Central European Railways, Plc, this paper shows the application of current analytical tests applied within the EU competition policy in order to examine and identify possible predatory pricing. Predatory prices are set in such a way that excludes rivals from competition which potentially leads to the weakening of the price mechanism and redistribution of wealth away from consumers to the dominant competitor. Therefore, predatory pricing cannot be interpreted equally with excessive prices, which only leads to enrichment of the dominant competitor at the expense of consumers. The European Court of Justice uses a set of procedures based on a modified Areeda-Turner test (Russo et al., European Commission Decisions on Competition: Economic Perspectives on Landmark Antitrust and Merger Cases, 2011) to evaluate possible predatory pricing: the first and second AKZO test. The first AKZO test uses the criteria of marginal costs, which in practice are most often approximated by using average variable costs. The second AKZO test applies special price bands defined by average variable costs and average total costs. Prices below average total costwhich is the sum of the fixed and variable costsbut above average variable costs are regarded as abusive if there is a plan to eliminate a competitor. In addition to these economic parameters, there is an element of subjectivity which refers directly to the postulated competitive strategy of the dominant competitor. Production at prices below average variable costs of each unit sold generates a loss totaling all fixed costs and at least a part of variable costs. It is assumed that if the dominant competitor carries out production for such prices, there is no other interest