--%>
Assignment Help - homework help

Problem about commercial and fiscal informative statements

A court assigned to me (as an auditor and economist) a valuation of a market butcher’s. The butcher’s did not give any simple income statements or any valuable information that I could use in my valuation. This is a small business with just two workers, the owner and an apprentice. This kind of tax system exempts them of specific commercial and fiscal informative statements.

I think this is very significant to underline that the object of the valuation is not a company, but quite a business, a work position. Although this has recurrent customers the value of its tangible assets is only the value of its tools, like the premises are rented (I think this is impossible to value the intangible asset which is the work). Here discounting cash flows in not a suitable method in this case. In fact, I do not know that profession fits better the job which the court assigned to me.

E

Expert

Verified

In order to value the butcher’s like a business you must also forecast the flows this will give. As the butcher’s does not consider being a business with a high rate of growth, you can see how much the owner earned for all the ideas, during the past years (the raises in the cash holdings, when any).

From such quantity you must subtract a reasonable wage and the difference you acquire is the flow for the shareholder. Though, this is just for the case where such type of valuation results superior to the liquidation value (when the local or the leasehold assignment was very valuable).

   Related Questions in Corporate Finance

  • Q : Finc . A&B Enterprises is trying to

    . A&B Enterprises is trying to select the best investment from among four alternatives. Each alternative involves an initial outlay of $100,000. Their cash flows follow: Year A B C D 1 $10,000 $50,000 $25,000 $ 0 2 20,000 40,000 25,000 0 3 30,000 30,000 25,000 45,0

    		•
  • Q : How could prestigious investment bank

    I have a doubt about the Enron case. How could this prestigious investment bank advice investing while the quotations of the shares were falling?

    		•
  • Q : How could we project exchange rates How

    How could we project exchange rates within order to be capable to forecast exchange differences?

    		•
  • Q : What is Stock Market Stock Market : To

    Stock Market: To trade company shares (or stock) and derivatives, a stock market or equity market is public entity where these shares and derivatives are sold at agreed price. These are to be listed on a stock exchange in order to trade publicly.

    		•
  • Q : What is Money Spreads Money Spreads :

    Money Spreads: Option trading strategies can be classified into various types like those pertaining to combination of one option with another option or set of options, other derivative contracts, stocks, etc. This paper focuses mainly on money spreads

    		•
  • Q : What is the expected risk premium on

    You have decided to invest 30 percent in X; 30 percent in Y; and 40 percent in Z. Theprobability of the state of the economy is Boom 25%; Normal 60%; and, Bust 15%. The rateof return for stock X is Boom .20; Normal .15; and, Bust .00. The rate of return for stock Y is

    		•
  • Q : Explain the structure

    Our company (A) is going to buy the other company (B). We need to value the shares of B and, thus, we will use three options of the structure Debt/Shareholders’ Equity in order to obtain the WACC as: 1) Present structure of A

    		•
  • Q : Who explain match theoretical & market

    Who demonstrated that how to match theoretical and market prices for normal bonds?

    		•
  • Q : Who wrote famous paper- distribution of

    Who wrote famous paper of on distribution of cotton price returns?

    		•
  • Q : Why is Split useful Why is Split useful?

    Why is Split useful?

    		•