Studying the material in the chapter will allow the student to: know

• conditions for using the income approach to business valuation;
• classification of cash flows and the specifics of their use;
• the essence of the concept of “discount rate” and the specifics of its use depending on the type of cash flow;

be able to

• forecast cash flows;
• take into account risks in the process of determining the current value of a business; own
• discounted cash flow method;
• methods of capitalization of cash flows;
• tools for substantiating the discount rate.

General principles of the income approach

The income approach allows you to determine the present value of future income that will arise as a result of the use of the company's assets. In this case, the greatest influence is exerted by the duration of the period of obtaining possible income, the degree and type of risks accompanying this process, as well as the volume of investments involved in the formation of cash flows.

Cost determined income approach, is most interesting for a potential buyer, since any investor purchasing an existing business is buying not just a set of assets, but a means of generating income. At the same time, the magnitude of the income stream must meet the investor’s expectations in terms of the rate of return on invested capital.

To determine a company's ability to generate future net income for its owner, an appraiser can use the following sources of information:

• - current financial reports of the company being assessed;
• - history of income, revenue, prices;
• - results of analysis of competitors' activities.

If we consider the work of innovation-oriented companies or the launch of new business lines, significant restrictions often apply to all categories of information sources. In this case, the company's current financial statements will not be able to fully reflect how profitable the investment in the new business will be, since the size and dynamics of cash flows, as well as the level of risk, may vary significantly and relate to different periods of time. In this situation, a retrospective analysis of the dynamics of income and expenses will not be able to show the company’s growth rates in the new conditions. In addition, if the company under evaluation produces unparalleled products using fundamentally new technological and technical solutions, it is not always possible to determine the pricing policy based on the actions of competitors, since there may be no analogous companies at all. Therefore, the key and practically the only source of information for assessing an innovation-oriented company is a high-quality, deeply developed business plan for its development, containing cash flows planned quarterly for the next few years. It should be taken into account that the assessment results will be correct only if two mandatory conditions are met:

• 1) new products will be in demand and will take their place in the market;
• 2) product output will invariably be accompanied by a positive cash flow.

Let's consider the principles of business valuation using the income approach.

Principle 1. The main criterion for evaluating a business is cash flow.

In regulatory legal documents cash flow is defined as “the time dependence of cash receipts and payments, calculated for the entire billing period, i.e. balance of inflows and outflows.”

Cash flow more reliably reflects the actual situation in the enterprise than the accounting profit indicator, since it has the following advantages:

• - cash flows take into account real inflows and outflows Money, including investments, dividend payments on preferred shares, redemption, servicing, as well as raising long-term borrowed funds. Thus, for an investor, it may be more clear to use the cash flow indicator: it reflects a number of parameters that are not involved in calculating the company’s net profit;
• - cash flow does not take into account depreciation charges as an outflow of funds, since the money that is transferred to the depreciation fund is at the disposal of the enterprise. Thus, within the framework of cash flow, depreciation is taken into account as part of expenses when calculating income tax, but is not an actual outflow.

These advantages allow you to use the cash flow indicator as a tool strategic planning operating and investment activities of the company and optimize the process of managing its value.

Depending on whether cash flows are taken into account at the beginning or at the end of the period under review, a distinction is made between prenumerando and postnumerando cash flow. In this case, cash flows are concentrated at one of the boundaries of the period under consideration: the pre-numerando flow is at the beginning of the period, the post-numerando flow is at the end of the period. In investment calculations, the most common cash flows are post-numerando.

In addition, depending on the sequence of the nature of cash flows, ordinary and extraordinary cash flows are distinguished. Ordinary cash flows are characterized by the fact that in the initial periods there is a negative value, which subsequently gives way to a positive one. If negative and positive cash flows constantly alternate, an extraordinary cash flow occurs.

• - cash flow from operational activities, which takes into account revenue from the sale of goods, payment wages, settlements with suppliers, interest payments on debt obligations and other current expenses;
• - cash flow from investment activities, which takes into account receipts of funds and payments associated with the sale, acquisition, as well as modernization and reconstruction of fixed assets;
• - cash flow from financial activities enterprise, which takes into account settlements with investors and creditors, as well as operations related to its own finances (issue and sale valuable papers, payment of dividends, etc.).

However, according to some experts, for example S.V. Valdaytsva, the proposed classification is reasonable when investment activities The enterprise is treated as a separate business that does not use debt or equity financing and is run to earn distributable profits. The investment activity of an ordinary enterprise is most often just an investment in maintaining and increasing the competitiveness of the enterprise. Therefore, it would be more logical to talk about the complete financial plan of specific investment projects of the enterprise, where, for example, both short-term and long-term investments in securities ( investment portfolio) are understood only as a way of accumulating funds for the enterprise’s planned investments in real assets.

Depending on the method of accounting for borrowed funds, a distinction is made between full and debt-free cash flow - these types are basic in the practice of business valuation.

Total cash flow (cash flow for equity) in composition and structure reflects the method of financing all investments made within the business, i.e. takes into account the attraction, servicing and repayment of borrowed funds.

Since the share and cost of borrowed funds in business financing are taken into account in the projected cash flow, discounting of expected cash flows can occur at the discount rate for equity capital, the specifics of which will be discussed below. Total cash flow reflects the amount of cash that the company's owners can claim after paying all obligations, including settlements with creditors. However, it is not always possible to predict the conditions for attracting borrowed funds, especially when implementing projects with a long or indefinite duration, and in this case they operate with debt-free cash flow.

Debt-free (free) cash flow does not include the movement of borrowed funds that are used to finance the business. In this case, cash flows should be discounted at a rate equal to the weighted average cost of capital of the enterprise. The amount of cash, which is the balance of the debt-free flow, is the amount that all business participants can claim. At the same time, situations may arise when, after repaying loan obligations, the owners will have nothing left. If the business valuation is carried out at the initiative of the owners, they are more interested in using full cash flows, which are more clear to them.

Depending on the method of accounting for price changes, nominal and real cash flows can be applied.

Planning nominal cash flows requires an assessment of changes in prices for final products produced within the framework of the business being assessed, as well as a forecast of the amount of inflation, and in all markets in which the resources necessary for the activity are presented.

This type of cash flow can provide even greater accuracy of investment calculations, but only if the appraiser really knows the state of the markets well, knows how to track all the changes occurring in them and is able to predict future conditions well. Based on relevant marketing research, he must take into account factors of the possible influence of future competitors, predict price changes, etc. This is due to the fact that an illiterate analysis of the market situation when using nominal cash flow can lead to significant errors in investment calculations.

Real cash flows- this is the balance of receipts and payments in prices of the base period associated with the sale of products and the purchase of resources. In the future, these prices may have a different meaning, since they depend on how much the initial price will change due to changes in the demand for products and the supply of resources.

When determining prices for products planned for release, it can be used price policy, not taking into account inflation. It may, for example, involve maintaining low prices in order to conquer its market sector.

Principle 2. Within the framework of the income approach, it is necessary to take into account the distribution of cash flows over time.

The procedure for discounting cash flows involves the need to take into account the time value of money and the trade-off between risk and return. Since a significant amount of time passes from the beginning of financial planning until the receipt of income, it is necessary to take into account this important factor, due to three main reasons:

inflation (the purchasing power of money decreases over time);

• - alternative cost (finances could have been invested in another project and received more income from it);
• - the risk of non-receipt of money. The more the owner risks when investing his capital in the target business, the greater the profitability he will want to receive, so it is very important when drawing up the financial part of the project to find and select the optimal combination of these parameters.

To take into account the distribution of cash flows over time, a discounting procedure is carried out.

Discounting- this is an estimated reduction of future income to the current point in time. When carrying out this procedure, the appraiser must keep in mind that the first negative cash flows to a newly created business make a much greater negative contribution than positive cash flows delayed over time. Therefore, one of the most important stages of the income approach is the justification of the discount rate. According to clause 2.7 Methodological recommendations The discount rate is determined taking into account alternative efficiency of capital use.

Principle 3. When planning cash flows, it is necessary to take into account and assess the risks of non-receipt.

One of the investment conditions taken into account in the discount rate is the level of risk. In this case, the following dependence is observed: the higher the risks of a business, the greater the profitability it provides. Since the most popular way to reflect risks when assessing the value of a business is to include them in the discount rate, a high level of risks contributes to its growth.

In financial theory there are many different classifications of risks, but in valuation practice the most popular approach is to divide them into systematic and unsystematic.

Systematic risks are determined by the market environment in which the business being assessed operates. They are also often called external risks, among which general systematic and industry risks can be distinguished. The former will determine the activities of all companies operating in a given country, regardless of their industry. Such risks, in particular, include inflation, changes in exchange rates, political climate, etc. The latter depend on the company’s industry and take into account factors such as the nature of competition among resource suppliers, customer needs, and the specifics of the assets used (for example, special equipment). To determine the industry of the business being valued, it is most correct to use SIC-kojx (Standard Industrial Classification) - four-digit code including narrow specialization. Its first two digits correspond to the main group of the industrial classification, the second two determine the subgroup.

Unsystematic risks - internal factors that affect the operation of a particular business that is faced this enterprise mainly due to ineffective management. It should be noted that when assessing a business, systematic risks are mainly taken into account, since they can be objectively assessed to one degree or another on the basis of available market information. Taking into account unsystematic risks is possible only through expert assessment, however, they are the main object of risk management and can be significantly reduced.

The main groups of unsystematic risks, as well as measures to minimize them, are presented in Table. 2.1.

Table 2.1

Main groups of unsystematic business risks and some ways to minimize them

The list of unsystematic risks presented in table. 2.1 is not complete for all cases. There are also risks in the field of management, compliance with deadlines and stages of the project schedule, risks of the closed nature of the company, the peculiarities of the work of small businesses and a number of others.

Principle 4. Active application of the principle of the most effective use.

Federal valuation standards oblige the application of the most effective use principle in investment calculations. The value of the subject of valuation, including the company, must be determined as the maximum of those values ​​that may occur when various options use of the valuation object. Even in the case of a stable business, it is advisable to plan investments in improving technology, upgrading equipment, updating products, etc. At the same time, the selection of sources of financing becomes a separate area of ​​investment planning. If you do not provide for updating physically worn-out equipment, the company will begin to experience more defects and an increase in the cost of products ready for sale. In any case, capitalization of constant or constantly falling income will give a very low estimate of market value.

Obviously, the principle of best use is more convenient to apply when the assessment is carried out based on the investment capabilities of a particular customer for the assessment. When determining the market value of a business for a potential, rather than a specific buyer, certain proposals for optimizing the business plan can significantly increase the value of the company.

The income approach is a way of valuing an income-generating enterprise (business), based on the capitalization or discounting of the monetary approach that is expected in the future from this enterprise.

The income approach is represented by two main methods:

Discounted cash flow method;

Profit capitalization method.

Income can be: cash flow, profit, dividends. IN Russian practice The most reasonable approach is to use cash flow as an indicator of income. This is due to the fact that profit is, firstly, a highly variable indicator, and, secondly, possibly greatly underestimated.

Discounted Cash Flow Method

The value of a business, obtained by the discounted cash flow (DCF) method, is the sum of the owner's expected future income, expressed in current value terms.

Determining the value of a business using this method is based on the assumption that a potential investor will not pay for this business more than the present value of future income derived from its operation (in other words, the buyer is not actually acquiring the property, but the right to receive future income from ownership of the property). Likewise, the owner will not sell his business for less than the present value of projected future earnings. It is believed that as a result of their interaction, the parties will come to an agreement on a market price equal to the present value of future income. The discounted cash flow method is based on an attempt to determine the value of a company (business) directly from the value of all various types the returns that investors who invest in this company can receive. This evaluation method is rightfully considered the most adequate from the point of view of investment motives, since it is quite obvious that any investor who invests money in an operating enterprise ultimately does not buy a set of assets consisting of buildings, structures, machinery, equipment, intangible assets and etc., but a stream of future income that will allow him to recoup his investments, make a profit and increase his well-being.

The discounted cash flow method can be used to value any existing business. The main stages of valuing an enterprise using the discounted cash flow method:

1) Selecting a cash flow model (type).

2) Determination of the duration of the forecast period and its units of measurement.

3) Conducting a retrospective analysis of gross sales revenue and its forecast.

4) Conducting analysis and preparing cost forecasts.

5) Conducting analysis and preparing investment forecasts.

6) Calculation of cash flow for each year.

7) Determination of an adequate discount rate. Calculation of current value ratios.

8) Calculation of the value in the post-forecast period.

9) Calculation of the present value of future cash flows and the value in the post-forecast period, as well as their total value.

10) Making final amendments.

11) Selecting a cash flow model.

IN general view The cash flow calculation scheme accepted in international practice falls into two stages.

The first is the conclusion of the net profit after taxes.

The second stage is the derivation of the net free cash flow indicator based on the net profit indicator.

The above calculation scheme illustrates one of the two cash flow models existing in world practice. Cash flow model for equity. The result of the calculation according to this model is the justified market value of the enterprise’s equity capital. Accordingly, the discount rate used in this model is the discount rate for equity capital based on the cost of attracting (rate of return) of this capital.

The second model is called the cash flow model for everything invested capital(“debt-free cash flow model”). The result of the calculation according to the second model is the reasonable market value of the enterprise’s capital, both its own and borrowed capital.

In our example, we will calculate the cost of cash flow for equity capital.

Determining the duration of the forecast period and its units of measurement.

According to the DCF method, the value of an enterprise is based on future rather than past cash flows. Therefore, the task is to develop a cash flow forecast (based on forecast cash flow reports) for some future time period, starting from the current year. The forecast period is a period that should continue until the company's growth rate stabilizes (it is assumed that in the post-forecast period there should be a stable long-term growth rate or an endless stream of income).

According to the current situation in developed countries market economy In practice, the forecast period for assessing an enterprise can be, depending on the purpose of the assessment and the specific situation, from 5 to 10 years. In countries with transition economies, where there is a high element of instability, adequate long-term forecasts are especially difficult, and in our opinion, it is permissible to reduce the forecast period to 5 years. At the same time, the accuracy of the result is increased by dividing the forecast period into smaller units of measurement: half a year or quarters.

The next stage of business valuation using the DCF method is developing a forecast of gross revenue - the most important element of cash flow forecasting. Fluctuations in gross revenue forecasts often lead to sharp changes in cost.

Analysis of gross revenue and its forecast require detailed consideration and consideration of a number of factors, including:

Range of products and services provided;

Production volumes and product prices;

Retrospective growth rates of the enterprise;

Demand for products and services;

Inflation rate;

Available production capacities;

Prospects and possible consequences capital investments;

The general situation in the economy, which determines the prospects for demand;

The situation in a specific industry, taking into account the existing level of competition;

Market share of the enterprise being assessed;

Long-term growth rates in the post-forecast period;

Plans of managers of this enterprise.

Should be adhered to general rule, which states that the gross revenue forecast must be logically compatible with the historical performance of the enterprise and the industry as a whole. Estimates based on forecasts that diverge markedly from historical trends are suspect.

When forecasting gross revenue, it is imperative to take into account three main components of any growth: inflationary price increases; growth in demand for products and, as a consequence, growth in sales volumes throughout the industry; and growth in sales volumes of a particular company.

Conducting analysis and preparing cost forecasts.

At this stage you need:

Consider retrospective interdependencies and trends;

Study the structure of expenses, in particular the ratio of fixed and variable costs;

Assess inflation expectations for each cost category;

Examine non-recurring and extraordinary items of expenses that may appear in financial statements for past years, but will not appear in the future;

Determine depreciation charges based on the current availability of assets and their future growth and disposal;

Compare projected costs with those of competitors or similar industry averages.

The key word when it comes to production costs is reasonable savings. If it is systematically achieved without compromising quality, the company's products remain competitive. To correctly assess this circumstance, it is necessary, first of all, to clearly identify and control the reasons for the emergence of individual categories of costs.

Two classifications of costs are important for business valuation. The first is the division of costs into fixed and variable, that is, depending on their changes when production volumes change.

Fixed costs do not depend on changes in production volumes (for example, administrative and management expenses; depreciation charges; sales expenses, less commissions; rent; property tax, etc.).

Variable costs (raw materials, wages of the main production personnel fuel and energy consumption for production needs) are usually considered proportional to changes in production volumes.

The classification of costs into fixed and variable is used, first of all, when conducting a break-even analysis, as well as to optimize the structure of products. The second classification is the division of costs into direct and indirect. It is used to assign costs to a specific type of product.

Conducting analysis and preparing investment forecasts.

Investment analysis includes three main components:

The amount of own working capital is the difference between current assets and current liabilities. It shows how much working capital is financed by the enterprise.

Calculation of cash flow for each year.

There are two main methods for calculating cash flow: indirect and direct. The indirect method analyzes cash flows by area of ​​activity. It clearly demonstrates the use of profits and the investment of available funds.

The direct method is based on the analysis of cash flows by items of income and expense, that is, by accounting accounts.

Total change in monetary funds should be equal to the increase (decrease) in the cash balance between two reporting periods.

Calculation of an adequate discount rate

From a technical, that is, mathematical, point of view, a discount rate is an interest rate used to recalculate future income streams, of which there may be several, into a single value of current (today’s) value, which is the basis for determining the market value of a business.

In an economic sense, the discount rate is the rate of return required by investors on invested capital in investment objects of comparable risk level or, in other words, it is the required rate of return on available alternative investment options with a comparable level of risk on the valuation date.

There are various methods for determining the discount rate, the most common of which are:

For cash flow for equity:

Capital asset valuation model;

Cumulative construction method;

For cash flow for all invested capital:

Weighted average cost of capital model.

The first way is using the capital asset model. This method is used for cash flow for equity. In his classic version The model formula is as follows:

R = Rf +I [ (Rm -Rf ] +S1 +S2 + C, (1)

where: R is the rate of return required by the investor (on equity capital);

Rf - risk-free rate of return;

Rm is the total return of the market as a whole (the average market portfolio of securities publicly traded on the stock market);

I - beta coefficient (is a measure of systematic risk associated with macroeconomic and political processes occurring in the country)

S1 - bonus for small enterprises;

S2 - premium for unsystematic risk characteristic of an individual company;

C - country risk.

When using this method, difficulties arise with determining the beta coefficient. Calculated statistical method this coefficient estimates changes in stock returns individual companies in comparison with changes in stock index returns. In this case, it is necessary to consider its stability over time. In addition, at present there is no consensus on what is more correct to choose as one or another element of the model. You can also point out that the use of this method of calculating the discount rate is limited to a few industries. These are the oil and gas and petrochemical industries, electric power, communications, and the metallurgical complex.

In this work, the capital asset valuation model is not used, since this technique applicable to companies whose shares are freely traded on the stock market. The enterprise is a closed company; its shares have zero profitability as an instrument of stock exchange transactions.

The second way to calculate the discount rate is the WACC (weighted average cost of capital) model. This method is applied to cash flow for all invested capital and is determined by the following formula:

R=kd(1-tc)wd+kpwp+ksws, (2)

where: kd is the cost of borrowed capital,

tc - income tax rate,

wd is the share of borrowed capital in the capital structure of the enterprise,

kp - value of preferred shares,

wp - share of preferred shares,

ks is the cost of ordinary shares,

ws - share of ordinary shares.

Since the cash flow model for equity was chosen, this method also not applicable.

Therefore, the third method was chosen as the basis for calculating the discount rate - the cumulative construction method, which best takes into account all types of investment risks associated both with factors of a general nature for the industry and economy, and with the specifics of the enterprise being valued. This method is especially applicable in cases where an enterprise is being assessed whose legal form is not a joint stock company.

The method is based on an expert assessment of the risks associated with investing in the business being assessed. The discount rate is calculated by adding up all identified risks and adding it to the risk-free rate of return. Investments in the Russian market are characterized by an increased level of risk, which leads to a higher discount rate. The general premise is that the greater the risk, the higher the expected rate of return on invested capital. In this case, the premium for each type of risk is determined in the range from 0% to 5%.

Western appraisal theory defines a list of main factors that must be analyzed. The sources are materials from the World Bank.

Calculation of the value in the post-forecast period

Determination of value in the post-forecast period is based on the premise that the business is able to generate income beyond the forecast period.

It is assumed that after the end of the forecast period, business income will stabilize and the remainder of the period will experience stable long-term growth rates or endless uniform income.

Depending on the prospects for business development in the post-forecast period, one or another method of calculating the discount rate is chosen. The following calculation methods exist:

By salvage value: this method is used if, in the post-forecast period, bankruptcy of the company is expected with the subsequent sale of existing assets. When calculating the liquidation value, it is necessary to take into account the costs associated with liquidation and the discount for urgency (in case of urgent liquidation). This approach is not applicable for assessing an existing profit-making enterprise, much less one in the growth stage;

By cost net assets: The calculation technique is similar to the calculation of liquidation value, but does not take into account the costs of liquidation and the discount for the urgent sale of the company's assets. This method can be used for a stable business, the main characteristic of which is significant tangible assets.

The "prospective sale" method: consists of recalculating cash flow into values ​​using special coefficients obtained from the analysis of historical sales data of comparable companies. Since the practice of selling companies on the Russian market is extremely scarce and non-existent, the application of this method to determine the final value is very problematic;

Gordon Model: capitalizes post-forecast annual income into value using a capitalization rate calculated as the difference between the discount rate and long-term growth rates. In the absence of growth rates, the capitalization rate will be equal to the discount rate. Gordon's model is based on the forecast of receiving stable income in the remaining period and assumes that the amounts of depreciation and capital investment are equal.

Calculation of the final cost in accordance with the Gordon model is carried out using the formula:

V (term) = CF (t + 1)/ K - g (3)

V (term) - cost in the post-forecast period;

CF (t +1) - cash flow of income for the first year of the post-forecast (residual) period;

K - discount rate;

g is the long-term growth rate of cash flow.

The final cost V (term) using the Gordon formula is determined at the end of the forecast period.

The value of the business thus obtained in the post-forecast period is reduced to current cost indicators at the same discount rate that is used to discount cash flows of the forecast period, minus the growth rate of cash flow in the post-forecast period.

Calculation of the present value of future cash flows and the value in the post-forecast period, as well as their total value.

When applying the DCF method in valuation, it is necessary to sum up the current value of the periodic cash flows that the valuation object brings in the forecast period, and the current value of the value in the post-forecast period, which is expected in the future.

The preliminary value of a business consists of two components:

The present value of cash flows during the forecast period;

The current value of the value in the post-forecast period.

Once the preliminary value of the enterprise has been determined, final adjustments must be made to obtain the final value of the market value. Among them, two stand out: an adjustment to the value of non-functioning assets and an adjustment to the amount of own working capital.

The first amendment is justified by the fact that when calculating the value, we took into account only those assets of the enterprise that are involved in production, making a profit, that is, in generating cash flow. But any enterprise at any given time may have assets that are not directly involved in production. If so, then their value is not included in the cash flow, but this does not mean that they have no value at all.

Currently, many Russian enterprises There are such non-performing assets (mainly real estate and machinery and equipment) because, due to the protracted decline in production, the level of utilization of production capacity is extremely low. Many such assets have a certain value that can be realized, for example, through sale. Therefore, it is necessary to determine the market value of such assets and add it to the value obtained by discounting cash flow.

The second amendment is taking into account the actual amount of working capital. In the discounted cash flow model, we include the required amount of working capital tied to the forecast level of sales (usually determined by industry standards).

The actual amount of working capital available to the enterprise may not coincide with the required one.

Accordingly, a correction is necessary: ​​excess working capital must be added, and the deficit must be subtracted from the preliminary cost.

As a result of valuing an enterprise using the DCF method, the value of the controlling liquid stake of shares is obtained.

If a non-controlling stake is valued, then a discount must be made.

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Course work

Estimating the value of an enterprise using the income approach

Introduction

business profitable cost

Quite a lot of attention is paid to business valuation in modern Russia. Enterprises are sold, bought, merged with each other, some go bankrupt and are transferred to the management of another owner.

In our country, many companies have even been created that, for a fee, assess the value of a business.

In modern literature, there are several main approaches. This is a costly approach; it takes into account the state of the research object. The second approach is comparative; it compares analogues, and based on them the value of the business is derived. The third approach is profitable. It takes into account the net profit and risks of the enterprise.

The purpose of this work is to conduct a business assessment.

The object of the study is JSC Elekond.

Job objectives:

1. Study the theoretical foundations of business valuation approaches.

2. Estimate the value of Elekond OJSC using the income method.

The course work includes two chapters. The first chapter presents business valuation and its role in the activities of an enterprise, a classification of the main approaches to business valuation.

The second chapter describes a brief description of JSC "Elekond", analysis of the main performance indicators of JSC "Elekond", income approach to business valuation.

1. Approaches toestimatesebusiness: theoretical basis

1.1 ABOUTpriceAbusinessand her rolein the activities of the enterprise

Business valuation represents the value of the enterprise as property complex, which is capable of generating income for its owner.

Business assessment includes an in-depth financial, organizational and technological analysis of the enterprise's activities. Past, present and forecast earnings, development prospects and competitive environment in this market.

The role of business assessment is great. Every business owner should know the real value of their business. This is necessary in case of selling a business, to attract investment, etc.

1.2 Classificationbasic approachto the valuation of an enterprise's business

There are three main approaches to business valuation:

1. Profitable.

2. Expensive.

3. Comparative.

Let's consider the income approach.

The income approach is based on cash flows. Cash flows represent the movement of the monetary system in the process of an enterprise making settlements or payments and receiving them. Cash flows consist of receipts (inflow) of funds and payments (outflow).

Let's consider a comparative approach. It is based on comparing the value of its assets with similar market assets. The basis of this approach is the opinion of the free market, expressed in the prices of completed purchase and sale transactions of similar companies or their shares (shares).

The comparative approach is used where there is a sufficient database of purchase and sale transactions. Therefore, the price of the actual transaction takes into account the market situation as much as possible.

The cost approach is used if it is impossible to find an analogue object, there is no experience in the implementation of similar objects, or the forecast of future income is not stable.

The cost approach involves determining the value of a business based on the calculation of the costs required to create or acquire, protect, produce and sell an intellectual property item at the time of valuation.

2 . Cost estimateOJSC « Elekond"

2.1 a brief description ofOJSC « Elekond"

JSC Elekond is one of the leading manufacturers and suppliers of aluminum, niobium and tantalum capacitors to the Russian market, the CIS and Baltic countries.

The history of the enterprise begins with the fact that on January 22, 1963, the Council of Ministers of the USSR issued Resolution No. 121 on the construction of a plant for the production of electrical capacitors in the city of Sarapul.

In 1968, the plant began its work on the production of oxide-semiconductor capacitors. To ensure compliance production plans and development technological process in 1974, a special design bureau was created at the enterprise, which carried out a number of works on the introduction of advanced technologies for the production of oxide-semiconductor capacitors, and also developed new types of capacitors. In addition to capacitors, the company has been producing consumer goods and industrial products since 1975.

On February 10, 1993, the company became a joint-stock company. The shareholders include the Ministry of Property Relations of the Udmurt Republic, the Ural Plants financial and industrial group, and a number of individuals and legal entities.

OJSC "Elekond" was created without limiting the period of its activity, is legal entity. Acts on the basis of the charter and legislation Russian Federation.

Legal address: 427968, Udmurt Republic, Sarapul, st. Kalinina, 3.

The main goal of society is to make a profit. To do this, the following tasks are solved:

1. Release of high-quality products that are in demand on the market.

2. Search for new markets.

3. Stimulating staff.

4. Creation of new jobs, etc.

Currently, the enterprise is operating in a crisis, but this has not affected its activities in any way. There was no reduction in personnel, wages, working week. This is due to the fact that the company has large government orders.

Open Joint Stock Company "Elekond" carries out the following main activities:

Development, production and sale of electronic equipment products (IET), including those using precious metals, production of special-purpose products and other products for industrial and technical purposes;

Development, production and sale of military products;

Ensuring the protection of information constituting state secrets in accordance with the tasks assigned to the company within its competence;

Production and sale of consumer goods;

Carrying out design, scientific research, development and technological work, conducting technical, techno-economic, legal and other examinations and consultations;

Trade, trade intermediary, purchasing, sales, creation of wholesale and retail trade divisions and enterprises;

Organization and holding of exhibitions, exhibitions and sales, fairs, auctions, trades, both in the Russian Federation and abroad;

Providing services to enterprises Catering, including the organization of the work of restaurants, cafes, bars, canteens;

Carrying out spectacular, pop, cultural events;

Production and processing of agricultural products;

Export-import operations and other foreign economic activities in accordance with current legislation;

Provision of services for the transmission of electrical and thermal energy;

Transportation of passengers by road;

Development of communication facilities and provision of communication services;

Non-state (private) security activities solely in the interests of one’s own safety within the framework of a security service created by society;

Other types of activities not prohibited by the legislation of the Russian Federation.

The governing bodies of the Open joint stock company"Elecond" are:

General Meeting of Shareholders;

Board of Directors;

CEO.

The highest governing body is the general meeting of shareholders, at which the board of directors and the general director are elected.

The Board of Directors of the Open Joint Stock Company "Elekond" exercises general management of the company's activities, with the exception of resolving issues related to federal laws and the Charter to the competence general meeting shareholders.

Management current activities of the company is carried out by the executive body - the general director of the company. To competence general director include all issues related to the management of the current activities of the company, with the exception of issues falling within the competence of the general meeting of shareholders and the board of directors of the company.

The General Director is directly subordinate to several departments (the second department, legal and the department of feasibility studies). His deputies are directly involved in the directions: Chief Engineer, on economic issues, Chief Accountant, for production and marketing, for commercial issues, for personnel, safety and social issues, head of the quality service.

The plant personnel are divided into four categories: managers, specialists, workers, and employees.

As can be seen from Table 1, the largest share in the structure of personnel by category is occupied by workers. Thus, in 2013, the share of this category was more than 67%, in 2014 - more than 69%, and in 2015 - more than 68%. Thus, there is a decrease in the share of workers in 2015 compared to 2014.

It is also necessary to conduct a qualitative analysis of personnel; it is presented in Table 2.

Based on Table 2, the following conclusion can be drawn. The largest number of personnel is between 30 and 40 years of age for all analyzed periods, and the smaller number is under 20 years of age. In general, the structure of personnel by age did not undergo major changes during the analyzed periods.

Table 2. Qualitative analysis of the personnel of JSC Elekond

As for the education of personnel, as can be seen from the table, the largest number falls on personnel with secondary specialized education. Positive aspects include an increase in the number of personnel from higher education, and a decrease in personnel with secondary education.

The table also shows that in terms of length of service, as new employees were hired, the number of employees with work experience of up to 5 years increased; in terms of other length of service criteria, there was also an increase.

2.2 Analysiskey indicatorsactivities of the JSC « Elekond"

Analysis of the main economic indicators allows you to identify the dynamics of deviations in revenue and cost, and track the growth rate of these indicators, since the dynamics of these indicators have a direct impact on gross profit.

An analysis of the main indicators of Elekond OJSC is presented in table. 3.

Table 3. Analysis of key performance indicators

The data in Table 3 shows that in the reporting period of 2015, compared to the base year of 2013, the company’s revenue increased by 37.9%, the cost increase was 35.3%, and gross profit increased by 40.2%. In addition, commercial expenses increased significantly by 68.8%, and administrative expenses by 43.8%. The growth in sales profit was 32.7%. Net profit increased by 25.4%.

Thus, the activity of the enterprise is profitable and profitable.

In Table 4, we consider the indicators characterizing the financial condition of Elekond OJSC.

Based on Table 4, the following conclusions can be drawn. The average monthly revenue of the enterprise increased in 2015 compared to 2013 by 30,178 thousand rubles. Its growth rate was 40.3%. This fact is a positive moment in the activities of the enterprise and indicates an expansion in the scale of production.

Table 4. Analysis of indicators financial condition JSC "Elekond" for 2013-2015.

In 2015, compared to 2013, the share of cash in revenue increased, which increases the company’s ability to fulfill its obligations in a timely manner.

The indicator characterizing the overall solvency of the enterprise increased in 2015 compared to 2013. The recommended dynamics for this indicator is growth.

The company's debt ratio in 2015 is lower than in 2013. A decrease in this indicator is definitely a positive trend.

The degree of solvency for current obligations in 2015 compared to 2013 is decreasing. Negative dynamics in the degree of solvency for current obligations caused by an imbalance in the rate of raising borrowed funds and the growth rate of income from economic activity.

The ratio of covering current liabilities with current assets is growing. In general, the growth of this indicator indicates an increase in the solvency of the enterprise.

Own capital in turnover tends to grow, which is a positive trend.

The share of equity capital in current assets in 2015 compared to 2013 increased, which indicates an increase in the degree of provision of the enterprise with its own working capital.

The coefficient of financial autonomy in 2014 tended to increase; there was no dynamics in 2015 compared to 2013. This generally suggests that the financial dependence of the enterprise has not increased or decreased.

In 2015, compared to 2013, there is an increase in the duration of current assets. The duration of turnover of funds in production, as well as funds in settlements, is also increasing.

Return on working capital in 2015 decreased compared to 2013 from 0.27 to 0.20, which is a negative trend.

Return on sales decreased from 0.21 to 0.20, a negative trend is also a negative point in the financial activities of the enterprise.

The product profitability indicator shows that in 2013, per ruble cost products sold accounted for 44 kopecks; in 2014, the profit per ruble of sales was 42 kopecks. profit, in 2015 - 44 kopecks. arrived.

In 2015, compared to 2013, the return on equity indicator is decreasing, which is a negative trend.

Return on permanent capital decreased from 0.28 to 0.18, which can also be attributed to negative dynamics.

In 2014-2015 Compared to 2013, the profitability of core activities decreased from 0.27 to 0.26.

To summarize, we can draw the following conclusion. At this point in time, the enterprise is solvent and financially stable, however, a set of measures is needed aimed at increasing the stability, solvency, and liquidity of the enterprise in order to minimize financial risks.

2.3 Income approachToestimatedkeOJSC « Elekond"

The income approach to business valuation is the most common in our time. The advantage of this approach is that it takes into account the impact on the value of the enterprise of such important factor, as profitability, which compensates for the shortcomings of other approaches. Since buying a business is an investment option, profitability is the main criterion for investment attractiveness. It is impossible to convince an investor to invest money in a business by simply summing up the assets of the enterprise. Therefore, the income approach is a priority when assessing the value of an enterprise, which determines the choice of this method.

One of the methods of the income approach is the discounting method. To use this method, it is necessary to calculate the discount rate (Table 5).

Table 5. Calculation of the discount rate

The discount factor at a rate of 17% is presented in Table 6.

Table 6. Discount factor

In 2015, JSC Elekond opened a new production facility - the production of LED lamps. Due to this, Elekond OJSC plans to increase net profit by 30% in 1 year, by 35% in the second year, and by 37% from 3 to 5 years.

Let's calculate the net profit for each year:

P1 = 342323*1.3 = 445020 thousand rubles.

P2 = 445020*1.35 = 600777 thousand rubles.

P3 = 600777*1.37 = 823064 thousand rubles.

P4 = 823064*1.37 = 1127598 thousand rubles.

P5 = 1127598*1.37 = 1544809 thousand rubles.

The results will be displayed in Table 7.

Table 7. Calculation of business value using the income approach

As a result of calculations, we found that the cost of the enterprise of OJSC Elekond will be 527,964.45 thousand rubles.

101124*1200/1000 = 124948.8 thousand rubles.

We found that the market value will be 124948.8 thousand rubles.

It turns out that the market value using the discounting method is higher than the value of the company, if we take into account the market value of the share.

Let's calculate the value of Elekond OJSC using the net profit capitalization method (Table 8).

Table 8. Calculation of the value of Elekond OJSC using the net profit capitalization method

Thus, the cost of Elekond OJSC using the net profit capitalization method will be 27,781,831 thousand rubles.

Let's compare all three methods (Table 9).

Table 9. Comparative analysis of the valuation of Elekond OJSC using the income approach

As can be seen from Table 9, calculating the value of Elekond OJSC using the net profit capitalization method differs from the discounting method and the share price method. The high price according to the capitalization method is due to the fact that the calculations take into account the average capitalization rate, and it is always lower than the actual one. The discounting method is considered the most attractive.

Conclusion

In conclusion, we draw the following conclusions.

There are three main approaches to business valuation: profitable, comparative, cost.

The object of the study was JSC Elekond, whose main activity is the production of capacitors.

The cost of Elekond OJSC was calculated using the income approach using:

Discounting method;

By market value of shares;

Net profit capitalization method.

As a result of calculations using the discounting method, we found that the value of the enterprise of Elekond OJSC will be 527,964.45 thousand rubles.

Based on the market value of the shares, the enterprise value will be 124,948.8 thousand rubles.

According to the net profit capitalization method, the value of Elekond OJSC will be 27,781,831 thousand rubles.

The discounting method is considered the most attractive.

Bibliography

1. Volkov I.M., Gracheva M.V. Design analysis. - M.: UNITY, 2011. - 450 p.

2. Godii A.M. Branding: Tutorial. Ed. 2nd revision and additional - M.: Publishing house "Dashkov and K", 2013. - 424 p.

4. Morozov V.Yu. Fundamentals of Marketing: Textbook. Ed. 5th revision and additional - M.: Publishing house. "Dashkov and K", 2011. - 148 p.

5. Pivovarov K.V. Business planning. - M., Publishing and bookselling center "Marketing", 2011. - 215 p.

6. Simionova N.E., Simionov R.Yu. Estimation of the value of an enterprise (business). Moscow: ICC “MarT”, Rostov n/a: Publishing center “MarT”, 2012. - 464 p.

7. Utkin E.A., Kotlyar B.A., Rapoport B.M. Business planning. - M., EKMOS Publishing House, 2011. - 446 p.

8. Chernyak V.Z., Chernyak A.V., Dovdienko I.V. Business planning. - M., RDL Publishing House, 2012. - 238 p.

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The business value management mechanism is based on the proposition that the value of a company is determined by its ability to generate cash flow over a long period of time. And its ability to generate cash flow (and therefore create value), in turn, is determined by factors such as long-term growth and the return that the company receives on its investments over and above its cost of capital.

Thus, the income approach, according to the International Valuation Standards (clause 6.7.2 MP6 ICO), provides for establishing the value of a business, a share in the ownership of a business or a security by calculating the value of expected benefits reduced to the current moment.

The two most common methods according to the International Valuation Standards under the income approach are:

Capitalization of income;

Discounting cash flow or dividends.

In income capitalization methods, to convert income into value, a representative amount of income is divided by the capitalization rate or multiplied by an income multiple. In theory, there can be a variety of definitions of income and cash flow. In discounted future cash flow and/or dividend methods, cash flows are calculated for each of several future periods. These receipts are converted into value by applying a discount rate using present value methods. Many definitions of cash flow can be used. In practice, net cash flow (cash flow that can be distributed to shareholders) or actual dividends (especially in the case of minority shareholders) are usually used. The discount rate must be consistent with the accepted definition of cash flow. Under the income approach, capitalization rates and discount rates are determined by market data and expressed as a price multiple (determined from publicly traded businesses or transactions) or an interest rate (determined from alternative investments). Expected income or benefits are converted into value through calculations that take into account the expected growth and timing of benefits, the risk associated with the flow of benefits, and the time value of money. Expected income or benefits should be calculated taking into account the capital structure and past business performance, business prospects, and industry and general economic factors. In calculating the appropriate rate (capitalization or discount rate), the appraiser must consider factors such as the level of interest rates, rates of return (return) investors expect from similar investments, and the risk inherent in the expected stream of benefits.

Discounted cash flow method.

The market valuation of a business largely depends on its prospects. When determining the market value of a business, only that part of its capital is taken into account that can generate income in one form or another in the future. At the same time, it is very important at what stage of business development the owner will begin to receive this income and what risk this is associated with. All these factors influencing the valuation of a business can be taken into account using the discounted cash flow method (hereinafter referred to as the DCF method). Determining the value of a business using the DCF method is based on the assumption that a potential investor will not pay for a given business an amount greater than the present value of future income from this business. The owner will not sell his business for less than the present value of projected future earnings. As a result of the interaction, the parties will come to an agreement on a market price equal to the present value of future income. This valuation method is considered the most acceptable from the point of view of investment motives, since any investor who invests money in an operating enterprise ultimately buys not a set of assets consisting of buildings, structures, machinery, equipment, intangible assets, etc., but a flow future income, allowing him to recoup his investments, make a profit and increase his well-being.

The DCF method can be used to evaluate any operating enterprise. However, there are situations when it objectively gives the most accurate result of the market value of an enterprise. The use of this method is most justified for evaluating enterprises that have a certain history of economic activity (preferably profitable) and are at the stage of growth or stable economic development.

This method is less applicable to the valuation of enterprises suffering systematic losses (although a negative business value can be a fact for making management decisions). Reasonable caution should be exercised in using this method to evaluate new businesses, even promising ones. The lack of earnings history makes it difficult to objectively forecast a business's future cash flows.

The main stages of valuing an enterprise using the discounted cash flow (DCF) method:

Stage 1. Selecting a cash flow model.

When valuing a business, we can use one of two cash flow models: CF for equity or CF for total invested capital. In both models, cash flow can be calculated both on a nominal basis (at current prices) and on a real basis (taking into account the inflation factor).

Stage 2. Determining the duration of the forecast period.

The forecast period is taken to last until the company's growth rate stabilizes (it is assumed that in the post-forecast period there should be a stable long-term growth rate or an endless stream of income). The longer the forecast period, the more justified from a mathematical point of view the final value of the current value of the enterprise looks, but the more difficult it is to predict specific amounts of revenue, expenses, inflation rates, and cash flows. According to the practice that has developed in countries with developed market economies, the forecast period for assessing an enterprise can be from 5 to 10 years, depending on the purpose of the assessment and the specific situation. In countries with economies in transition, in conditions of instability, where adequate long-term forecasts are especially difficult, it is permissible to reduce the forecast period to 3 years. To ensure accurate results, the forecast period should be divided into smaller units of measurement: half a year or quarter.

Stage 3. Retrospective analysis and forecast of gross sales revenue.

Analysis of gross revenue and its forecast involve taking into account a number of factors: the range of products; production volumes and product prices; retrospective growth rates of the enterprise; demand for products; inflation rates; available production capacity; prospects and possible consequences of capital investments; the general situation in the economy, which determines the prospects for demand; the situation in a particular industry, taking into account the existing level of competition; the share of the assessed enterprise in the market and market trends; long-term growth rates in the post-forecast period; plans of managers of this enterprise. The general rule that should be followed is that the gross revenue forecast must be logically compatible with the historical performance of the enterprise and the industry as a whole.

Stage 4. Analysis and forecast of expenses.

Here, we first study the cost structure taking into account hindsight, including the ratio of fixed and variable costs; assess inflation expectations for each cost category; study one-time and emergency items of expenditure; determine depreciation charges based on the current availability of assets and their future growth and disposal; calculate interest costs based on projected debt levels; compare projected costs with the corresponding indicators for competing enterprises or with similar industry averages. Costs can be classified on various grounds, but two classifications of costs are important for business assessment: 1) Classification of costs into fixed and variable; 2) Classification of costs into direct and indirect (used to attribute costs to a certain type of product). From the point of view of the concept of business cost management, cost analysis allows you to identify bottlenecks and reserves for reducing them, control the process of cost formation, and, as a result, effectively manage costs.

Stage 5. Investment analysis and forecast.

It is necessary to carry out to compile cash flows, since the activities of an enterprise in the long term are usually accompanied by various investment costs. This may include:

Capital expenditures, which include the costs of replacing existing assets as they wear out or overhauling them (predicted based on an analysis of the remaining service lives of the assets or the condition of the equipment);

Acquisition or construction of assets to increase production capacity in the future according to the company's development plans or business plans;

The need to finance additional working capital requirements (based on the forecast of changes in sales and output or according to the company’s development plans);

The need to attract financing (for example, through additional issue of securities) or to repay long-term loans (the forecast is made based on a study of development plans, existing debt levels and repayment schedules).

Stage 6. Calculation of cash flow for each year of the forecast period.

There are two main methods for calculating cash flow:

1) indirect (element-by-element) analyzes the cash flow by area of ​​activity, when each component of the cash flow is predicted taking into account management plans, investment projects, identified trends; extrapolation is possible for individual elements, etc. At the same time, revenue from sales of products (works, services) is forecast using methods of extrapolation of industry statistics (industry growth rates) and planning. To forecast fixed costs - extrapolation, analysis of a fixed level of fixed costs, elements of planning. To forecast variable costs, extrapolation, analysis of the retrospective share of variable costs in sales revenue, and planning elements are used.

2) The direct (holistic) method is based on a retrospective analysis of cash flows, when cash flow values ​​for the previous three to five years are calculated with their further extrapolation or, in agreement with the administration of the enterprise, the growth rate of cash flow as a whole is predicted. Typically, the following variation of the holistic method is used: first, the appraiser builds a trend for the entire forecast period, then, if necessary, makes adjustments (for the purchase of equipment and the corresponding change in depreciation charges, for receiving income from the planned sale of unused tangible assets, the stage of the enterprise’s life cycle, etc.) . The holistic method in the appraisal report can be reflected as follows: “After studying the dynamics of cash flow over the past three years, the situation in the industry and discussing management plans, the Appraiser assumed the following: the growth of the enterprise’s cash flow in the first forecast year will be 25%, in the second - 10%, by the end of the third year this growth will slow down, amounting to 3% per year and the average annual growth rate in the post-forecast period will remain at 3% per year.”

The element-by-element method is more accurate, but also more complex.

In cases where the information for the assessment is not provided in full, the appraiser is allowed to use more simplified methods: the arithmetic mean method, the weighted average method.

Stage 7. Determining the discount rate.

From a technical standpoint, i.e. From a mathematical point of view, a discount rate is an interest rate used to recalculate future income streams (there may be several of them) into a single value of current (today's) value, which is the basis for determining the market value of a business. In an economic sense, the role of the discount rate is the rate of return required by investors on invested capital in investment objects of comparable risk levels. If we consider the discount rate on the part of the enterprise as an independent legal entity, separate from both the owners (shareholders) and creditors, then it can be defined as the cost of raising capital by the enterprise from various sources.

The discount rate or cost of capital must be calculated taking into account three factors: the availability of different sources of capital that require different levels of compensation; the need for investors to take into account the time value of money; risk factor. In this case, risk refers to the degree of probability of obtaining expected future income.

There are various methods for determining the discount rate, the most common of which are:

1) If cash flow is used for equity:

Capital asset valuation model;

Cumulative construction method;

2) If cash flow is used for all invested capital:

Weighted average cost of capital model.

In accordance with the capital asset pricing model (CAPM - in the commonly used abbreviation for English language) the discount rate is determined by the formula:

 - beta coefficient (is a measure of systematic risk associated with macroeconomic and political processes occurring in the country);

R m - total return of the market as a whole (average market portfolio of securities);

S 1 - bonus for small enterprises;

S 1 premium for risk specific to an individual company;

C - country risk.

The method of cumulative construction of the individual discount rate under consideration differs from the capital asset valuation model only in that in the structure of this rate, a cumulative premium for investment risks is added to the nominal risk-free interest rate, which consists of premiums for individual “unsystematic” risks related specifically to this project. risks. . Calculation of the discount rate by cumulative construction can be expressed by the following formula:

where R is the rate of return required by the investor (on equity capital);

R f - risk-free rate of return;

S 1 , S 2 ...S n – premiums for the risk of investing in the company being valued, including those associated with both general factors for the industry, economy, region, and with the specifics of the company being valued (risk associated with the quality of general management, risk of investment management , risk of non-receipt of income, risk of illiquidity of the object, etc.).

In this case, risk premiums are determined by experts after a thorough risk analysis for each group of factors.

In world practice, the risk-free rate of return is usually the rate of return on long-term government debt obligations (bonds or bills); the rate on investments characterized by the lowest level of risk (the rate on deposits of a bank with a high degree of profitability, for example, Sberbank), etc. For an investor, it represents an alternative rate of income, which is characterized by a virtual absence of risk and a high degree of liquidity. The risk-free rate is used as a reference point to which an assessment of various types of risk characterizing investments in a given enterprise is tied, on the basis of which the required rate of return is built.

For cash flow for all invested capital, a discount rate is applied equal to the sum of the weighted rates of return on equity and borrowed funds (the rate of return on borrowed funds is the bank's interest rate on loans), where the weights are the shares of borrowed and borrowed funds. own funds in the capital structure. This discount rate is called the Weighted Average Cost of Capital (WACC). The weighted average cost of capital is calculated using the following formula:

(1.3)

Where r j is the cost of the j-source of capital, %;

d j – share of j-source of capital in general structure capital.

In this case, the cost of borrowed capital is determined taking into account tax effects:

Where r is the cost of attracting borrowed capital (loan interest rate);

t NP - corporate income tax rate.

The cost of raising equity capital (preferred shares, ordinary shares) is determined by their level of return to shareholders.

Stage 8. Calculation of the value in the post-forecast period.

Determination of value in the post-forecast period is based on the premise that the business is able to generate income beyond the forecast period. With effective management of an enterprise, its lifespan tends to infinity. It is not practical to forecast several tens or hundreds of years in advance, since the longer the forecast period, the lower the forecast accuracy. It is assumed that after the end of the forecast period, business income will stabilize and in the remaining period there will be stable long-term growth rates or endless uniform income. To take into account the income that the business can generate outside the forecast period, the cost of reversion is determined.

Reversion is income from the possible resale of property (enterprise) at the end of the forecast period or the value of property (enterprise) at the end of the forecast period.

Depending on the prospects for business development in the post-forecast period, one of the following methods is selected for calculating its value at the end of the forecast period:

1) According to liquidation value. Applies only if bankruptcy of the enterprise is expected in the post-forecast period with the subsequent sale of existing assets. The costs associated with liquidation and the urgency discount in case of urgent liquidation are taken into account.

2) Based on net asset value. Can be used for a stable business, the main characteristic of which is significant material assets (capital-intensive production), or if at the end of the forecast period the sale of the enterprise's assets is expected at market value.

3) Deemed sale method. Cash flow is converted into values ​​using special ratios obtained from the analysis of historical sales data of comparable companies. In the Russian market, due to the small amount of market data, the use of the method is problematic.

4) Gordon's model. The most commonly used model is based on a forecast of stable income in the remaining period and assumes that the values ​​of depreciation and capital investments are equal if, in the post-forecast period, bankruptcy of the company is expected with the subsequent sale of existing assets. Under the Gordon model, post-forecast annual income is capitalized into value indicators using a capitalization rate calculated as the difference between the discount rate and long-term growth rates. In the absence of growth rates, the capitalization rate will be equal to the discount rate. Calculations are carried out according to the formula:

where FV is the expected value in the post-forecast period;

СF n +1 - cash flow of income for the first year of the post-forecast (residual) period;

DR - discount rate;

g - long-term (conditionally constant) growth rates of money

flow in the residual period.

Conditions for using the Gordon model:

1) income growth rates are stable;

2) capital investments in the post-forecast period are approximately equal to depreciation charges;

3) the rate of income growth does not exceed the discount rate, otherwise the model’s assessment will give irrational results.

4) income growth rates are moderate, for example, do not exceed 3-5%, since high growth rates are impossible without additional capital investments, which this model does not take into account. Moreover, constant high rates of income growth for an indefinitely long period of time are hardly realistic.

Stage 9. Calculation of the present values ​​of future cash flows and the value in the post-forecast period.

Current (present, discounted, present) value - the value of the enterprise's cash flows and reversions, discounted at a certain discount rate to the valuation date. Present value calculations involve multiplying the cash flow (CF) by the period n unit present value factor (DF), taking into account the selected discount rate (DR). Discounting the cost of reversion is always carried out at the discount rate taken at the end of the forecast period, due to the fact that the residual value (regardless of the method of its calculation) always represents the value for a specific date - the beginning of the post-forecast period, i.e. the end of the last year of the forecast period.

When applying the discounted cash flow method in valuation, it is necessary to sum up the current values ​​of the periodic cash flows that the valuation object brings in the forecast period, and the current value of the business in the post-forecast period. Thus, the preliminary value of a business consists of two components - the current value of cash flows during the forecast period and the current value of the value in the post-forecast period:

(1.6.)

Stage 10. Making final amendments

After determining the preliminary value of the enterprise, final adjustments must be made to obtain the final value of the market value. Among them, two stand out: an adjustment to the value of non-functioning assets and an adjustment to the amount of own working capital.

As a result of valuing an enterprise using the discounted cash flow method, the value of the controlling liquid stake of shares is obtained. If it is not a controlling stake that is being assessed, then it is necessary to make allowances for the lack of control rights.

The second method of the income approach is the PROFIT (INCOME) CAPITALIZATION METHOD- is based on the basic premise that the value of an ownership interest in an enterprise is equal to the present value of the future income that ownership will generate. From the position of Gryaznova A.G., Fedotova M.A. etc. The profit capitalization method is most suitable for situations in which it is expected that the enterprise will receive approximately the same amount of profit over a long period of time (or its growth rate will be constant). Compared to the DCF method, the income capitalization method is simpler, since it does not require the preparation of medium- and long-term income forecasts, but its use is limited to enterprises with relatively stable income, whose sales market is established and no significant changes are expected in the long term. Therefore, unlike real estate valuation, this method is used quite rarely in business valuation.

The income capitalization method is implemented by capitalizing future normalized cash flow or capitalizing future averaged profit:

The income (profit) capitalization method also consists of several stages:

Stage 1. Justification of stability (relative stability) of income generation is carried out on the basis of an analysis of normalized financial statements. The main documents for analyzing the financial statements of an enterprise are the balance sheet and the income statement. financial results and their use. For the purposes of assessing an operating enterprise, it is desirable to have these documents for the last three years. Normalization of reporting - adjustments to various extraordinary and one-time items of both the balance sheet and the income statement and their use, which were not of a regular nature in the past activities of the enterprise and are unlikely to be repeated in the future.

Stage 2. Selecting the type of income that will be capitalized. Capitalized income in business valuation can be revenue or indicators that in one way or another take into account depreciation charges: net profit after taxes, profit before taxes, cash flow. Profit capitalization is most suitable for situations in which the company is expected to earn approximately the same amount of profit over a long period of time.

Stage 3. Determining the amount of capitalized income (profit).

The following can be selected as the amount of income subject to capitalization:

1) the amount of income predicted for one year after the valuation date;

2) the average value of the selected type of income, calculated on the basis of retrospective (for example, for the last few reporting years 5-8 years) and, possibly, forecast data.

3) income of the last reporting year.

Determining the size of the predicted normalized income is carried out using statistical formulas for calculating the simple average, weighted average or extrapolation method.

Stage 4. Calculation of the capitalization rate.

Capitalization rate is a coefficient that converts one year's income into the cost of an object. The capitalization rate is characterized by the ratio of annual income and property value:

where R is the capitalization rate;

I is the expected income for one year after the valuation date;

PV - cost.

The capitalization rate for a business is usually derived from the discount rate by subtracting the expected average annual growth rate of earnings or cash flow (whichever is being capitalized). Accordingly, for the same enterprise the capitalization rate is usually lower than the discount rate. If the income growth rate is assumed to be zero, the capitalization rate will be equal to the discount rate. So, in order to determine the capitalization rate, you must first calculate the appropriate discount rate using possible methods: capital asset valuation model; cumulative construction method or weighted average cost of capital model. With a known discount rate, the capitalization rate is determined in general form using the following formula:

Where DR is the discount rate;

g is the long-term growth rate of profit or cash flow.

Stage 5. Capitalization of income and determination of the preliminary value of the cost. The preliminary cost is calculated using the formula:

(1.10.)

Step 6. Making adjustments for the presence of non-performing assets (if any) and for the controlling or non-controlling nature of the assessed interest and for lack of liquidity (if necessary). To make adjustments for non-performing assets, an assessment of their market value is required in accordance with accepted methods for a specific type of asset (real estate, machinery and equipment, etc.).

Market (comparative) approach tobusiness valuation

The income approach is considered the most acceptable from the point of view of investment motives, since any investor who invests money in an operating enterprise ultimately buys not a set of assets consisting of buildings, structures, machinery, equipment, intangible assets, etc., but a stream of future ones income, allowing him to recoup his investments, make a profit and increase his well-being. From this point of view, all enterprises, no matter what sectors of the economy they belong to, produce only one type commercial products-- money.

The income approach is a set of methods for estimating the value of the valuation object, based on determining the expected income from the valuation object. profitable international business

The feasibility of using the income approach is determined by the fact that summing up the market values ​​of an enterprise’s assets does not reflect the real value of the enterprise, since it does not take into account the interaction of these assets and the economic environment of the business.

The income approach involves establishing the value of a business (enterprise), an asset or a share (contribution) in equity capital, including authorized capital, or a security by calculating expected income at the valuation date. This approach is used when it is possible to reasonably determine the future cash income of the company being valued.

Methods of the income approach to business valuation are based on determining the current value of future income. The main methods are:

• - income capitalization method;
• - method of discounting cash flows.

When assessing the income capitalization method, the level of income for the first forecast year is determined and it is assumed that the income will be the same in subsequent forecast years (in the case of applying the discounted cash flow method, the level of income for each year of the forecast period is determined).

The method is used to evaluate enterprises that have managed to accumulate assets that generate stable income.

If it is assumed that future income will change over the years of the forecast period, when enterprises are implementing an investment project that affects cash flows or are young, the discounted cash flow method is used. Determining the value of a business using this method is based on separate discounting of changing cash flows at different times.

It is assumed that a potential investor will not pay more for a given business than the present value of future earnings from that business, and the owner will not sell his business at a price that is lower than the present value of projected future earnings. As a result of the interaction, the parties will come to an agreement on a market price equal to the present value of future income.

Cash flows are a series of expected periodic cash receipts from the activities of an enterprise, rather than a one-time receipt of the entire amount.

The market valuation of a business largely depends on its prospects. It is the prospects that allow us to take into account the method of discounting cash flows. This valuation method is considered the most acceptable from the point of view of investment motives and can be used to evaluate any operating enterprise. There are situations when it objectively gives the most accurate result of assessing the market value of an enterprise.

The results of the income approach allow business managers to identify problems that hinder business development; make decisions aimed at increasing income.

Let's consider practical use profit capitalization method by stages:

• - analysis of the financial statements of the enterprise;
• - determination of the amount of profit that will be capitalized;
• - calculation of the capitalization rate;
• - determination of the preliminary value of the enterprise’s business;
• - making final amendments.

The analysis of an enterprise's financial statements is carried out on the basis of the enterprise's balance sheet and income statement. It is advisable to have these documents for at least the last three years. When analyzing the financial documentation of an enterprise, it is necessary to normalize it, i.e. make adjustments for non-recurring and extraordinary items, both the balance sheet and the income statement, which were not of a regular nature in the past activities of the enterprise and are unlikely to be repeated in the future. In addition, if the need arises, you can transform financial statements enterprises, i.e. present it in accordance with generally accepted accounting standards.

Determining the amount of profit that will be capitalized is actually choosing the period of time for which the profit is calculated:

• - profit of the last reporting year;
• - profit of the first forecast year;
• - average profit for the last 3-5 years.

In most cases, the profit of the last reporting year is used.

The calculation of the capitalization rate is usually based on the discount rate by subtracting the expected average annual growth rate of earnings. To determine the discount rate, the following methods are most often used:

• - capital asset valuation model;
• - cumulative construction model;
• - weighted average cost of capital model.

The preliminary value of an enterprise’s business is determined using a simple formula:

V - cost;

I is the amount of profit;

R - capitalization rate.

Final adjustments (if necessary) are made for non-functional assets (those assets that do not participate in the generation of income), for a lack of liquidity, for a controlling or non-controlling stake in the assessed shares or shares.

The capitalization of earnings method of valuing a business's business is typically used when there is sufficient data to determine normalized cash flow, current cash flow is approximately equal to future cash flow, and expected growth rates are moderate or predictable. This method is most applicable to enterprises that generate stable profits, the amount of which varies slightly from year to year (or the rate of profit growth is constant). Unlike real estate valuation, in business valuation of enterprises this method is used quite rarely and mainly for small enterprises, due to significant fluctuations in profits or cash flows over the years, which is typical for most large and medium-sized enterprises.

Estimating the value of an enterprise's business using the discounted cash flow method is based on the assumption that a potential buyer will not pay more for the enterprise than the present value of future business income from this enterprise. The owner will likely not sell his business for less than the current value of projected future earnings. As a result of interaction, the parties will come to an agreement on a price equal to the current value of the enterprise's future income.

Valuation of an enterprise using the discounted cash flow method consists of the following steps:

• 1. choosing a cash flow model;
• 2. determining the duration of the forecast period;
• 3. retrospective analysis and forecast of gross revenue;
• 4. cost forecast and analysis;
• 5. forecast and analysis of investments;
• 6. calculation of cash flow for each forecast year;
• 7. determination of the discount rate;
• 8. calculation of the cost value in the post-forecast period.
• 9. calculation of the current values ​​of future cash flows and value in the post-forecast period;
• 10. making final amendments.

The choice of cash flow model depends on whether it is necessary to distinguish between equity and debt capital or not. The difference is that interest on servicing borrowed capital can be allocated as an expense (in the cash flow model for equity capital) or taken into account as part of the income stream (in the model for all invested capital), and the amount of net profit changes accordingly.

The duration of the forecast period in countries with developed market economies is usually 5 - 10 years, and in countries with transition economies, in conditions of instability, it is permissible to reduce the forecast period to 3 - 5 years. As a rule, the forecast period is taken to last until the growth rate of the enterprise stabilizes (it is assumed that there is a stable growth rate in the post-forecast period).

Retrospective analysis and forecast of gross revenue requires consideration and consideration of a number of factors, the main ones being production volumes and product prices, demand for products, retrospective growth rates, inflation rates, capital investment prospects, industry situation, enterprise market share and overall economic situation. The gross revenue forecast must be logically compatible with the enterprise's historical business performance.

Cost forecast and analysis. At this stage, the appraiser must study the structure of the enterprise's expenses, in particular the ratio of fixed and variable costs, evaluate inflation expectations, exclude one-time items of expenses that will not occur in the future, determine depreciation charges, calculate the cost of paying interest on borrowed funds, compare projected expenses with corresponding indicators of competitors or the industry average.

The forecast and analysis of investments includes three main components: own working capital ("working capital"), capital investments, financing needs and is carried out, accordingly, on the basis of the forecast of individual components of own working capital, on the basis of the estimated remaining service life of assets, on the basis of needs for financing existing debt levels and debt repayment schedules.

Calculation of cash flow for each forecast year can be done by two methods - indirect and direct. The indirect method analyzes cash flows by area of ​​activity. The direct method is based on the analysis of cash flows by items of income and expense, i.e. according to accounting accounts.

Determining the discount rate (the percentage rate for converting future earnings into present value) depends on what type of cash flow is used as the basis. For cash flow for equity, a discount rate equal to the owner's required rate of return on equity is applied; for cash flow for all invested capital, a discount rate is applied equal to the sum of the weighted rates of return on equity and borrowed funds, where the weights are the shares of borrowed and equity funds in the capital structure.

For equity cash flow, the most common methods for determining the discount rate are the cumulative method and the capital asset pricing model. For cash flow for total invested capital, the weighted average cost of capital model is typically used.

When determining the discount rate using the cumulative method, the calculation base is based on the rate of return on risk-free securities, to which additional income associated with the risk of investing in this type of securities is added. Then adjustments are made (increasing or decreasing) to the effect of quantitative and qualitative risk factors associated with the specifics of a given company.

In accordance with the capital asset valuation model, the discount rate is determined by the formula:

R = Rf + in(Rm - Rf) + S1 + S2 + C

R is the rate of return on equity capital required by the investor;

Rf - risk-free rate of return;

Rm is the total return of the market as a whole (the average market portfolio of securities);

b - beta coefficient (a measure of systematic risk associated with macroeconomic and political processes occurring in the country);

S1 - bonus for small enterprises;

S2 - premium for risk specific to an individual company;

C - country risk.

According to the weighted average cost of capital model, the discount rate is determined as follows:

WACC = kd x (1 - tc) x wd + kpwp + ksws,

kd is the cost of borrowed capital;

tc - profit tax rate;

wd is the share of borrowed capital in the capital structure of the enterprise;

kp is the cost of attracting equity capital (preferred shares);

wp is the share of preferred shares in the capital structure of the enterprise;

ks - cost of raising equity capital (ordinary shares);

ws is the share of ordinary shares in the capital structure of the enterprise.

The calculation of the value in the post-forecast period is made depending on the prospects for business development in the post-forecast period, and the following methods are used:

• - method of calculation based on liquidation value (if bankruptcy of the company with subsequent sale of assets is expected in the post-forecast period);
• - calculation method based on net asset value (for a stable business with significant material assets);
• - the estimated sale method (recalculation of the projected cash flow from the sale into the current value);
• - Gordon's method (income of the first post-forecast year is capitalized into value indicators using the capitalization ratio, calculated as the difference between the discount rate and long-term growth rates).

The calculation of the current values ​​of future cash flows and the value in the post-forecast period is made by summing the current values ​​of the income that the object brings in the forecast period and the current value of the object in the post-forecast period.

Making final adjustments - usually these are adjustments to non-functional assets (assets that do not participate in generating income) and to the actual amount of working capital. If a non-controlling interest is valued, an allowance must be made for the lack of control.

The discounted future cash flow method is used when the entity's future cash flow levels are expected to differ significantly from its current levels, the future cash flows can be reasonably estimated, the projected future cash flows are positive for most forecast years, and the cash flow is expected to Last year forecast period will be a significant positive value. In other words, this method is more applicable to income-generating enterprises with a certain history of economic activity, with unstable streams of income and expenses.

The discounted cash flow method is less applicable to business valuation of enterprises suffering systematic losses (although a negative business value can be an argument for making a particular decision). Some caution should also be exercised in applying this method when assessing the business of new enterprises, because The lack of earnings history makes it difficult to objectively forecast future cash flows.

The discounted cash flow method is a very complex and time-consuming process, but throughout the world it is recognized as the most theoretically based method of business valuation operating enterprises. In countries with developed market economies, when assessing large and medium-sized enterprises, this method is used in 80 - 90% of cases. The main advantage of the method is that it is the only known valuation method that is based on the prospects for the development of the market in general and the enterprise in particular, and this is most in line with the interests of investors.