Question

Anyone can help me answer this question around 300 words each with typing and with link!!! need it asap!!! (finance statement analysis)

Asset and Liability Valuation and Income Recognition List some valuation methods for assets. Then go to the Internet and find 3 companies that you feel offer unique valuation challenges. Post links that help us understand your 3 firms and the assets they own. Discuss your research.

Answer 1

Valuation methods

1. Asset-Based Approaches

Basically, these business valuation methods total up all the investments in the business. Asset-based business valuations can be done on a going concern or on a liquidation basis.

• A going concern asset-based approach lists the business's net balance sheet value of its assets and subtracts the value of its liabilities.
• A liquidation asset-based approach determines the net cash that would be received if all assets were sold and liabilities paid off.

2. Earning Value Approaches

These business valuation methods are predicated on the idea that a business's true value lies in its ability to produce wealth in the future. The most common earning value approach is Capitalizing Past Earning.

With this approach, a valuer determines an expected level of cash flow for the company using a company's record of past earnings, normalizes them for unusual revenue or expenses, and multiplies the expected normalized cash flows by a capitalization factor. The capitalization factor is a reflection of what rate of return a reasonable purchaser would expect on the investment, as well as a measure of the risk that the expected earnings will not be achieved.

3. Market Value Approaches

Market value approaches to business valuation attempt to establish the value of your business by comparing your business to similar businesses that have recently sold. Obviously, this method is only going to work well if there are a sufficient number of similar businesses to compare.

Assigning a value to a sole proprietorship based on market value is particularly difficult. By definition,​ sole proprietorship are individually owned so attempting to find public information on prior sales of like businesses is not an easy task.

Although the Earning Value Approach is the most popular business valuation method, for most businesses, some combination of business valuation methods will be the fairest way to set a selling price.