Fundamentals of the Liquidation Method of Business Valuation

Poborský, František

doi:10.1016/s2212-5671(15)00749-2

Cited by 2 publications

(2 citation statements)

References 5 publications

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“…386-393]. Poborský [2015] notices that the literature devoted to business valuation fails to take the most essential problematic areas regarding liquidation valuation into account, i.e. how the valuer should plan the debt repayment schedule, which laws must be considered, how the transaction costs should be assessed, or how the discount factor should be determined.…”

Section: A Theoretical Presentation Of Company Liquidation In the Reference Literaturementioning

confidence: 99%

Voluntary liquidation: When is it financially profitable?

Wnuczak

2019

JMFS

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The aim of this article is to offer insight into a concept making it possible to assess the financial rationality of the voluntary liquidation of businesses. The author of the study presents a decision-making algorithm that should be applied before deciding to voluntarily liquidate a business entity. The algorithm is based on the concept of Value Based Management (VBM), and the related calculations have been performed following the basic rules of mathematical finance. The presented solution is also based on the calculation of free cash flow generated by an enterprise for its owners and on investigating the relationship between the said cash flow and the rate of return expected to be attained by the enterprise’s owners. Because no such models are given or discussed in the literature covering the subject matter, it appears that the proposed solution may become a valuable tool to improve the process of making a decision in the scope of voluntary liquidation of an enterprise.

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Section: A Theoretical Presentation Of Company Liquidation In the Reference Literaturementioning

confidence: 99%

Voluntary liquidation: When is it financially profitable?

Wnuczak

2019

JMFS

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“…Corporate value can be determined in various ways [1,2,3]. One of them is the expression of a company's market value in its stock prices.…”

Section: Introductionmentioning

confidence: 99%

The impact of capital structure on the market value of energy sector companies on the example of companies from Poland

Ranosz

2019

E3S Web Conf.

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The focus of this article is to analyse the impact of capital structure on the value of energy sector companies listed on the Warsaw Stock Exchange. The proposed study will cover the last four years, i.e. 2014-2017, in quarterly terms. In addition to the mentioned capital structure parameter, the analysis also covers such indicators as return on equity (ROE) and return on assets (ROA). The study will use multiple regression based on the deltas of the respective parameters describing their changes quarter-to-quarter. The author of this publication assumes that capital structure may have an impact on the value of energy sector companies. The assumption is based on the market phenomenon whereby capital structure seems to reflect to a certain extent the risk incurred by investors: on the one hand, the higher the share of borrowed capital in financing an enterprise’s operations, the higher the risk; on the other hand, the higher the proportion of equity in the financing of corporate operations, the lower the chance for dividends to be paid to investors in the respective companies. Investigating the mentioned phenomenon will make it possible, to a certain extent, to answer the question of whether Polish investors are more willing to accept investment risk in exchange for a higher return on investment or whether they would rather limit investment risk and yield lower profit from the capital invested in a given enterprise.

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Fundamentals of the Liquidation Method of Business Valuation

Cited by 2 publications

References 5 publications

Voluntary liquidation: When is it financially profitable?

Voluntary liquidation: When is it financially profitable?

The impact of capital structure on the market value of energy sector companies on the example of companies from Poland

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