The Statistics of Differences among the Company Book Values and the Company Valuations worked out by Income and Cost Approach

Přehled rozdílů mezi účetní hodnotou a oceněním výnosovou a majetkovou metodou 42 českých společností v letech 1997 až 2004

Jan Jurečka

Český finanční a účetní časopis, 2006, vol. 2006, issue 2, 140-145

Abstract: The Company Valuation is the important base for the set of business transactions, because the Book Value is not regarded as good picture of the real company assets. There are the three basic Valuation Approaches: the Income, Cost and Market ones. In Czech practice the last Approach is not used often for the insufficiency of appropriate data. The article presents the results of 42 valuation works, in which the students of the Institute of Property Valuation of University of Economics in Prague used both the Income Approach and Cost Approach (IOM VŠE, 2004). The article compares the results of these two approaches with the book value of valuated companies and with the final results of companies´ valuations. The aim of the article is to judge if there are the significant differences between results of mentioned approaches, by using simple comparisons. This study, according to the five points of view (5 statistic tables) proved that the results of the Cost Approach Valuations exceed the results of the Income ones. The reason is the low productivity of the company assets and the problems with the sale of companies´ products. Generally - according to this study, the Company Valuations are underestimated in average, or by other words, the efficiency of important number of studied firms is lower than according to the firms´ asset it would be.

Keywords: Companies' Valuations; Companies' Valuation Approaches; Income Approach Valuation; Cost Approach Valuation; Book Value of firm; Ocenění podniku; Metody oceňování podniku; Výnosová metoda ocenění podniku; Věcná metoda ocenění podniku; Substanční metoda ocenění podniku; Účetní hodnota podniku (search for similar items in EconPapers)
JEL-codes: G30 (search for similar items in EconPapers)
Date: 2006
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DOI: 10.18267/j.cfuc.162

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