Strategic Value Analysis: Business Valuation

Wing Sun Li
Additional contact information
Wing Sun Li: Beijing Normal University–Hong Kong Baptist University

Chapter 10 in Strategic Management Accounting, 2018, pp 171-192 from Springer

Abstract: Abstracts This chapter is a second part of the prior chapter which provides step-by-step guidelines to assess business valuation of a firm by using discount cash flow technique through four main stages. The first process is to convert strategic plans into a financial forecast plan through establishment of strategic bases and key assumptions. The second stage articulates the steps to prepare free cash flows – the essential document for business valuation. As discount rate is a key consideration for business valuation, the third part discusses the criteria for selection of discount rate and the implication of discount rate to business valuation. The final stage introduces the concept of terminal value (perpetual value) of a business which is the business value beyond the forecast period. As a “going concern” basis of the business valuation, it is an integral part of the entire business valuation but is often underestimated in the valuation process. The chapter proposes an approach to tap this perceptual value into the business value computation. A case is presented throughout the chapter to illustrate step by step how business valuation is formulated. This chapter showcases to readers how business valuation is conducted in a systematic approach.

Keywords: Strategic value analysis; Corporate forecast; Financial valuation; Terminal value; Discount rate (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:mgmchp:978-981-10-5729-8_10

Ordering information: This item can be ordered from
http://www.springer.com/9789811057298

DOI: 10.1007/978-981-10-5729-8_10

Access Statistics for this chapter

More chapters in Management for Professionals from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().