In a transitional economy, many economic entities are not able to survive in the competition and provide the financial indicators necessary for normal life. To evaluate mainly such enterprises (it is often called property), the cost approach is used. Its ideological basis is to assess the market value of assets still at disposal or certain costs for the construction of a new comparable facility. Most often, such assets are the property remaining at the disposal of the object, and not the results of its production and economic activities. Therefore, in many literary sources this approach is called property. But the cost approach is also applicable to efficiently functioning facilities.

The financial basis of the cost approach is the balance of the object. However, due to inflation, changes in market conditions and the influence of many other factors, the book value of assets differs significantly from the market value. Therefore, it is necessary to first assess the current market value of each balance sheet asset separately. The cost of the company's liabilities is subject to the same procedure. Using the cost approach, depending on the objectives of the assessment, determine different kinds cost.

For the purpose of buying and selling an object, it is calculated market value, when taxing - replacement cost; upon liquidation of an enterprise salvage value, to justify new construction - replacement cost.

The ultimate goal of using the cost approach is to calculate the estimated cost equity enterprises. The basic model for this calculation is:

C \u003d PV A - PV obligation

where C is the equity capital of the object; PV A - the total market value of all assets of the enterprise; PV liability - the present value of the company's liabilities.

The cost approach to enterprise valuation is mainly implemented using two methods: net asset value and salvage value.

net asset method, in world practice often called asset accumulation method, is based on the definition market value of all assets of the object: tangible (land, buildings, equipment, inventories), financial and intangible (trademark, know-how, patents, licenses, etc.). It includes the following main steps:

Assessment of the market value of the real estate object;

Determination of the market value of machinery and equipment;

Identification and evaluation of intangible assets;

Determining the market value of financial investments, both long-term and short-term;

Translation of the book value of inventories into current value;

Evaluation of receivables and deferred expenses;

Translation of the object's liabilities into the current value;

Determination of the cost of equity capital according to the basic formula.

The market value of the assessed tangible assets of the object, which include real estate, machinery and equipment. Their value is determined taking into account wear. At the same time, under wear and teardo not understand the amount of accounting depreciation(depreciation charges based on the service life), and the loss of value due to physical destruction, technological (design) imperfection, changes in the economic situation, etc.

The loss of value due to aging, the rise in the cost of repair and maintenance of obsolete equipment, and the action of other physical factors that reduce the life and usefulness of an object are called physical obsolescence.

The decrease in the value of an object, caused by the loss of the ability to perform some of its inherent functions, is considered functional obsolescence. It usually manifests itself due to design flaws that cause an increase in the cost of maintaining the facility in operational condition. A kind of functional obsolescence is technological obsolescence, which manifests itself under the influence of changes in the production technology of products that reduce the productivity of an object.

economic obsolescence call the loss in the value of an asset caused by market conditions: increased competition, a decrease in demand for products, etc.

Inventory are usually valued at their expected selling price. Obsolete inventory is usually written off.

Financial assets, consisting of receivables, purchased securities and deferred expenses, are evaluated in accordance with their specifics. Securities usually have a certain market price, which is considered their value. Accounts receivable are divided according to the timing of its occurrence: overdue - written off (partially or completely), future - discounted. Prepaid expenses are valued at their nominal value if they prove to be profitable.

Intangible assets usually include: the company's trademark, its regular clientele, contracts for the supply of its own products and resources necessary for production, received (or acquired) patents, licenses, know-how, selected personnel, etc. Their assessment one by one in the majority is quite difficult.

In Western practice, the concept of intangible assets is generally used to evaluate goodwill, which is understood as the totality of all elements of the business that encourage customers to continue to prefer the products or services of this facility. Thus, goodwill cannot be separated from the object, it cannot be subject to purchase and sale on its own. There are many ways to calculate goodwill, but, as a rule, evaluate goodwill two of them : using the Tobin ratio, when the market value of the enterprise exceeds the book value of its assets, or as excess profit. The algorithm of the latter is the following. First determine the market value of tangible assets. Then, the average industry return on equity is determined, which is used to calculate the profit received on tangible assets (by multiplying the industry return by its value of assets). The difference between profit from production and economic activities and profit from tangible assets is excess profit.

The part of intangible assets, consisting of patents and licenses, can be valued using the concept of “royalties”, i.e. remuneration received by the owner of a patent under a license agreement for the right to use by others (usually in the form of a certain percentage of income from the volume of sales of products obtained with the help of a patent).

The total market value of tangible, financial and intangible assets represents the market value of the total capital of the enterprise.

The company's short-term and long-term liabilities are converted into their current value.

The difference between the market value of the entire capital of the enterprise and the present value of its liabilities is the market value of the enterprise, obtained using the net assets method.

Salvage value method technologically similar to the net asset method. Its distinguishing feature lies in the fact that the amount of current costs associated with the liquidation of the enterprise is deducted from the cost of equity, determined by the net asset method. Such costs include payment for an order for the valuation of assets, legal services related to the liquidation of the enterprise, taxes and fees that are provided for during the sale. They also include the cost of maintaining inventories and work in progress, equipment, buildings and structures, administrative costs of maintaining the enterprise until the completion of its liquidation, termination benefits and payments to staff in connection with his dismissal. The liquidation value obtained in this way is corrected for the amount of profit (loss) received from the main production activity during the liquidation period.

The main advantage of cost methods approach is that the estimates they receive are based on the real values ​​owned by the object. This allows evaluation even in the absence of historical data on production and financial results, so they are also suitable for the evaluation of new objects. The world practice of appraisal activity shows that when using three approaches (profitable, comparative and costly) for the same object, significantly different appraisal values ​​are obtained. Therefore, it is common to use several methods related to different approaches. Calculating the weighted average cost by the weight of each of them, determine the final value of the assessment.

Method weight depends on the purpose of the assessment and the reliability of the information used. When evaluating investment projects, the greatest share is given to the discounted cash flow method, in case of liquidation of an enterprise - liquidation method, in case of sale and purchase - capital market, etc.

cost approach, general characteristics approach. Net asset value method. salvage value method.

Net Asset Value Method

The cost approach to business valuation considers the value of the enterprise in terms of the costs incurred. This approach is represented by two main methods: the net asset value method and the salvage value method.

The net asset value of equity is obtained by valuing all of a company's assets less all of its liabilities. The calculation by the net asset value method includes several stages:

1) the real estate of the enterprise is valued at a reasonable market value;

2) the reasonable market value of machinery and equipment is determined;

3) identify and evaluate intangible assets;

4) the market value of financial investments is determined;

5) inventories are translated into current value;

6) accounts receivable are estimated;

7) deferred expenses are estimated;

8) the company's liabilities are translated into the current value;

9) the cost of equity capital is determined by subtracting the current value of all liabilities from the fair market value of the sum of assets.

To assess real estate (land and buildings, structures), it is possible to use three approaches: profitable, comparative (market) and costly. The application of the cost approach includes the following steps: the cost is determined land plot on which buildings, structures are located; the replacement cost or replacement cost of the building and structure is assessed as of the actual assessment date; all types of depreciation of buildings and structures are calculated taking into account their physical, functional, technological and economic obsolescence; the residual value of buildings and structures is determined as the difference between the cost of reproduction and total depreciation; the total value of the property is calculated by adding to residual value buildings and structures of the cost of the land plot.

The cost approach requires a separate assessment of the value of land.

The cost approach to the valuation of machinery and equipment is based on the principle of substitution, the meaning of which is that if there are several similar objects, one of them, having lowest price, is in the highest demand. To determine the cost of restoration or replacement cost, which are the basis of calculations in the cost approach, it is necessary to calculate the costs associated with the creation, acquisition and installation of the object being evaluated. In the cost approach in the valuation of machinery and equipment, the following main methods can be distinguished: the method of calculating the price of a homogeneous object; element-by-element calculation method; index method of evaluation.

When using the cost approach in the valuation of intangible assets, the following are used: the cost of creation method and the cost benefit method.

Determining the value of goodwill (goodwill) is calculated based on the assessment of excess profits.

The appraisal of financial investments is carried out based on their market value as of the date of appraisal and is the subject of close attention of the appraiser.

Inventories are valued at current prices, including transportation and warehousing costs. Obsolete inventory is written off.

Prepaid expenses are measured at nominal cost if there is still an associated benefit. If there is no benefit, then the amount of deferred expenses is written off.

When assessing accounts receivable, an analysis is carried out by the terms of its repayment, identification of overdue debts. Unwritten receivables are valued by discounting future principal and interest payments to their present value.

"Cost approach in business valuation"

cost asset business costly

Introduction

Relevance of the research topic. When selling an enterprise, it is necessary to objectively assess its ability to increase its value, to be profitable, i.e. generate income for the owner. That is, it is necessary to calculate the market value of the enterprise - the most probable price of the enterprise at which it will be sold.

This course project uses a costly approach to valuation, the relevance of which is primarily due to the presence, as a rule, of reliable initial information for the calculation, as well as the use of methods traditional for the domestic economy to assess the value of a business, based on an analysis of the value of the enterprise's property and its debt .

The degree of development of the problem. The issues of theory and practice of business valuation have found enough wide application in the works of both domestic and foreign scientists. It was for developments in this area that they were awarded Nobel Prize J. Tobin, F. Modigliani, G. Markowitz, M. Miller and W. Sharp, M. Scholes and R. Merton. Such foreign authors as G. Alexander, I. Ansoff, R. Brailey, J. Bailey, A. Damodaran, G. Desmond, K. Griffith, T. Koller, T. Copeland, R. Kaplan, S. Myers, J. Murrin, D. Norton, S. Pratt, W. Sharp, J. Fishman, C. Wilson. However, the main disadvantage of the approaches presented in them is the excessive complexity of calculations and interpretation of the results obtained. Therefore, it is important to find an approach that will reflect all important elements estimates and contain easier calculation.

Goals and objectives of the study. The purpose of this work is to study the process of estimating the value of a business using a cost approach.

In accordance with the goal, the following tasks were set and resolved:

to characterize the concept of the cost approach to business valuation;

identify the positive and negative aspects of applying the cost approach to business valuation;

to characterize the main methods by which business is assessed using the cost approach;

evaluate the cost of Goldman Sachs LLC using the cost approach.

Theoretical and methodological foundations of the study. The theoretical methodological base of this work is made up of such general scientific conclusions as logical, comparative, systemic, as well as methods economic analysis: subject-object, categorical.

The empirical base was the statistical data published in the scientific literature.

Work structure. The set goals, objectives and research methods determined the structure of this term paper. It consists of an introduction, 4 paragraphs combined into two chapters of the conclusion and a list of references.

1. Theory of the cost approach in business valuation

.1 Essence of the cost approach, its advantages and disadvantages

The property (cost) approach in business valuation considers the value of the enterprise in terms of costs incurred. The balance sheet value of the assets and liabilities of the enterprise due to changes in market conditions, inflation, the calculation methods used, usually does not correspond to the market value. As a result, the appraiser faces the task of adjusting the balance sheet of the enterprise.

The basic formula for the cost approach is:

Equity = Assets - Liabilities

The main feature of the cost approach is an element-by-element valuation, that is, the property complex being valued is divided into its component parts, each part is evaluated, and then the value of the entire property complex is obtained by summing up the costs of its parts. This approach to the assessment of enterprises combines the following methods: accumulation of enterprise assets; adjusted book value (or net asset methodology); substitution; calculation of the liquidation value of the enterprise. All these valuation methods are combined into a cost approach according to one main feature: they are based on determining the current prices of the value of certain types of property of an enterprise or the costs of building a similar enterprise (replacement method) and subtracting the enterprise's debts.

All methods of the cost approach are based on one information base - the balance sheet of the enterprise and allow you to calculate various types of enterprise value: the method of accumulating assets - the market value; replacement technique - replacement cost; method of liquidation value - the liquidation value of the enterprise. These types of costs have different quantitative expressions, and their calculation is necessary to accept different management decisions. For example, when selling an enterprise, its market value is determined using the asset accumulation method; when insuring the property of an enterprise, the method of determining the replacement cost is more often used; when liquidating an enterprise, the method of liquidation value makes it possible to determine its liquidation value; when justifying the construction of a new enterprise, the substitution methodology is applied.

The main methods are:

net assets method;

salvage value method.

A generalization of the practice of applying the methods of the cost approach to valuation made it possible to establish that the main areas of their use are:

Ø assessment of the controlling stake in the enterprise;

Ø enterprise valuation with high level capital intensity;

Ø assessment of enterprises with significant intangible assets and the possibility of their allocation and assessment;

Ø valuation of holding or investment companies;

Ø assessment of enterprises that do not have retrospective data on profits;

Ø appraisal of new businesses recently registered;

Ø valuation of enterprises that are heavily dependent on contracts or do not have a permanent clientele;

Ø valuation of enterprises, a significant part of whose assets are financial assets.

This list of areas of application of cost approach methods to enterprise valuation is not exhaustive. There are other cases where these techniques can be used, for example, to reconcile the results of the assessment obtained by the comparative approach.

Valuers should be aware of the advantages and disadvantages of cost approach techniques. They are presented in the table.

Table 1. Advantages and disadvantages of the cost approach in business valuation

Advantages and disadvantages ü Takes into account the impact of industrial farms. factors per change. asset value. ü Gives an assessment of the level of technology development, taking into account the degree of depreciation of assets. ü Calculations are based on financial and accounting documents, i.e. assessment results are more justified ü Reflects past value. ü Doesn't teach. market situation at the date of assessment. ü Does not take into account perspective. Developed enterprises. ü Does not take into account risks. ü Static. ü There is no connection with present and future results. enterprise activities. ü Complicated and laborious to use.

It can be seen from the table that there are a lot of shortcomings in the cost approach in assessing the value of a business, but this approach is one of the most used in Russian and foreign practice.

1.2 Cost Approach Methods: Net Asset Method and Residual Value Method

As mentioned above, the cost approach includes two main methods for evaluating an enterprise: the net asset method and the liquidation value method. Let's consider them in more detail.

net asset method

This method does not require the identification of analogues, but is based only on the data of the firm being valued. This is its advantage, but at the same time its disadvantages. As you know, a business is bought for future income, not past costs. The essence of the method is that the market value of assets is determined by adjusting the balance sheet data, from which the market value of liabilities is deducted.

The net asset value indicator was introduced by the Civil Code of the Russian Federation to assess the degree of liquidity of organizations.

Net assets - this is a value determined by subtracting from the amount of assets of a joint-stock company accepted for calculation, the amount of its liabilities accepted for calculation.

The procedure for calculating the value of net assets in an accounting estimate is determined in accordance with the Procedure for estimating the value of net assets joint-stock companies. Valuation using the net asset methodology is based on the analysis financial reporting. She is an indicator financial condition business at the valuation date, actual net income, financial risk and market value of tangible and intangible assets.

The main financial statements analyzed in the evaluation process:

§ balance sheet;

§ reports: about financial results, about the movement Money;

§ applications for them.

Other formal forms may also be used. financial statements and internal company reporting.

Determination of the market value of the real assets of the enterprise should be carried out taking into account: physical depreciation, economic depreciation, technological depreciation and functional depreciation.

These types of depreciation are taken into account when determining the market value, first of all, of real non-expendable assets. The latter may also be referred to as investment goods.

The market value of so-called expendable assets, as well as revolving funds, in the form of reserves finished products, can be taken equal to their unamortized carrying amount, since it is assumed that for a relatively a short time after their acquisition or creation on their own the market value of these types of property has not had time to change significantly compared to the market price at which they were purchased or offered for sale.

Physical depreciation - the degree of exhaustion of the "passport" fund of working time (service life).

Economic depreciation - depreciation of property (including similar), which occurred due to a change in the ratio between supply and demand in the case when supply increased compared to demand.

Technological wear and tear is the depreciation of an asset (equipment, patents, etc.) due to the appearance on the market of analogues that satisfy the same need, but have a better ratio between price and quality.

Functional depreciation is the depreciation of an asset if it turned out to be structurally or functionally underdeveloped compared to analogues that later appeared on the market.

Types of tangible assets of the company: real and financial.

Real:

real estate (buildings, premises, land, structures);

equipment (tools, fixtures and instrumentation);

working capital (stocks of raw materials, materials ..., work in progress, finished products, receivables, cash)

Financial: securities, bank deposits.

salvage value method.

The liquidation value calculation method is based on the assessment of the market value of assets and liabilities. The difference from the net asset value method is determined by differences in the state of enterprises.

The main difference is that in order to liquidate the assets, the enterprise is forced to pay commissions to intermediaries, bear the cost of dismantling and reduce the price below market value to ensure liquidity. The value of the assets sold is deducted from the value of the liabilities, costs of the enterprise, commissions to intermediaries, taxes on the sale of property. All income and costs must be determined at the time of valuation.

The net proceeds received after the liquidation of the assets of the enterprise and the payment of its debts are reduced to the current value. This method is used, in particular, in case of bankruptcy of enterprises.

Experts distinguish between three types of liquidation value of enterprises:

.orderly, when the sale of the assets of the liquidated enterprise is carried out within a reasonable period so that the highest possible sale prices of the assets can be obtained;

.the liquidation value of the termination of the existence of the assets of the enterprise, when the assets of the enterprise are not sold, but written off and destroyed. The value of the enterprise in this case is a negative value, since the owner of the enterprise requires certain costs for the liquidation of assets.

2.Practical calculation of the value of the enterprise

.1 The system of indicators in assessing the value of the enterprise by the cost approach

Using the calculation algorithms below, you can calculate the valuation of a business using two methods of the cost approach. These techniques are widely used to evaluate existing and bankrupt enterprises in Russia at the present time.

Methodology of net assets of the enterprise.

The value of the net assets of the enterprise is understood as the value determined by subtracting the amount of long-term and short-term liabilities from the total assets of the enterprise.

Algorithm for implementing the net asset methodology (adjusted book value):

.The balance sheet items of the enterprise for the asset are summarized (table 2).

.The liabilities (debts) of the enterprise in terms of the liabilities side of the balance sheet are summarized (Table 2).

.The amount of liabilities is deducted from the amount of assets.

.The market value of the land is added to the resulting difference, and the value of the net assets of the enterprise is obtained.

Table 2 - Articles of the book value of the property and liabilities of the enterprise

Enterprise assetsEnterprise liabilities (only liabilities)residual value of intangible assetsTarget financing and receiptsresidual value of fixed assetsrental liabilitiesequipment to be installedlong-term bank loansuncompleted capital investmentslong-term loanslong-term financial investmentsshort-term bank loansother non-current assetsbank loans to employeesinventory stockshort-term loansanimal settlements with lendersresidual value of low-value and fast-wearing itemsadvance payments received from customers and customers with the foundersdeferred expensesreserves for future expenses and paymentsfinished productsother short-term liabilitiesgoodsother stocks and costsgoods shippedsettlements with debtorsadvance payments issued by suppliers and contractorsshort-term financial investmentscash other current assetsTOTAL assets of the enterpriseTOTAL liabilities of the enterprise

The adjustment of balance sheet items in order to assess the value of the enterprise consists both in the normalization of financial statements and in the adjustment of some balance sheet items of the enterprise:

)balance sheet asset item "Long-term and short-term financial investments". It excludes the actual costs of repurchasing own shares from shareholders;

)asset balance sheet Receivables". It excludes the debt of participants on contributions to authorized capital;

)balance sheet liability item "Accounts payable". It excludes debts to participants for the payment of income.

After adjusting the company's balance sheet items, you can calculate the net worth of its assets using the above algorithm.

Methodology for calculating liquidation value.

The liquidation value of the enterprise is calculated as gross proceeds from the liquidation of assets - liquidation costs - accounts payable.

When calculating the liquidation value of an enterprise that is not in bankruptcy arbitration proceedings, it is necessary to take into account and subtract from the replacement (adjusted) value of assets the costs of liquidating the enterprise. These are the administrative costs of maintaining the operation of the enterprise until the completion of its liquidation, severance payments and payments, the cost of transporting the sold assets, etc. The amount of money received from the sale of assets, cleared of associated costs, is discounted at the valuation date at an increased discount rate that takes into account the related this sale is a risk.

Basic formulas:

to calculate the gross salvage value of an enterprise's assets:

PV = FV * 1/(1+i/m)^n, where

PV - liquidation value of the asset FV - adjusted book value i - discount rate m - 12 months n - liquidation period, number of months

To calculate the discount rate:

WACC= Kd*Wd+Ks* Ws*(1-T)

kd -cost of borrowing capital;

wd -the share of borrowed capital in the capital structure of the enterprise

Ks -cost of attraction share capital(ordinary shares);

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

T - income tax rate

-to calculate the gross cost of liquidation costs, taking into account the liquidation schedule and the discount rate:

PV = PMT * [(1- 1/(1+i/m)^n)/i/m]

Amount of liquidation costs

2.2 Calculation of the value of the business using the net assets method and the salvage value method

Having considered two main methods in business valuation using the cost approach, we will give an example of the calculation by the net assets method and the liquidation value method. We will act as an appraiser of Goldman Sachs LLC.

Calculation by the net asset method.

The following indicators are reflected in the balance sheet of Goldman Sachs LLC for the period from 2009 to 2011:

Table 3 - Balance sheet value of property and liabilities of Goldman Sachs LLC for 2009-2011, thousand rubles.

Indicator 12/31/2011 12/31/2010 12/31/2009AssetsIntangible assets000Fixed assets4371461226517Profitable investments in tangible assets000Long-term financial investments0020198431Deferred tax assets235475244147258365Other non-current assets tax06308 valuables597810Accounts receivable4435105585091705907Krotkos. Finan. investments (excl. cash equivalents) 217647547556985715767Denezhnye and cash ekvivalenty123299564048572410Prochie aktivy262944591815Itogo current cost of borrowedPassivyDolgosrochnye sredstva0021149925Otlozhennye tax obyazatelstva000Dolgosrochnye obyazatelstva185733824518509281Prochie estimated long-term debt obyazatelstva000Kratkosrochnye sredstva117355235345345305099Kreditorskaya zadolzhennost3285615205930041Dohody future periodov000Kratkosrochnye estimated obyazatelstva250411675201653745Prochie short obyazatelstva000Itogo cost091

Calculate the value of net assets. To do this, we need to adjust the data for the following asset and liability lines:

.“Long-term and short-term financial investments”: from this line it is necessary to exclude the value of own shares repurchased from shareholders, but since given value, according to the balance sheet, is equal to 0, then no adjustment is made.

."Accounts receivable": it excludes the debt of participants for contributions to the authorized capital. According to the financial statements as of December 31, 2011, this debt is absent; graph is not subject to change.

."Accounts payable" is the amount of 328561 thousand rubles. and is accepted for calculation, because there is no debt of participants on contributions to the authorized capital.

Table 4 - Final calculation of the net asset value of Goldman Sachs LLC, thousand rubles.

Pokazatel31.12.2011AktivyNematerialnye aktivy0Osnovnye sredstva437Dohodnye investments in tangible financial tsennosti0Dolgosrochnye vlozheniya0Otlozhennye tax aktivy235475Prochie noncurrent aktivy0Zapasy0Nalog value added on purchased tsennostyam597Debitorskaya zadolzhennost443510Kratkosrochnye financial investments (excluding cash equivalents) 2176475Denezhnye and cash ekvivalenty123299Prochie aktivy2629Itogo current cost of borrowed imuschestv2982422PassivyDolgosrochnye sredstva0Otlozhennye tax obyazatelstva0Dolgosrochnye obyazatelstva185733Prochie estimated long-term debt obyazatelstva0Kratkosrochnye sredstva1173552Kreditorskaya debt328561Deferred income0Short-term estimated liabilities250411Other current liabilities0Total value of liabilities1938257Total value of net assets1044165

RUB 982,422 thousand - 1,938,257 thousand rubles. = 1,044,165 thousand rubles.

Thus, the total market value of the equity capital of Goldman Sachs LLC using the net assets method was 1,044,165 thousand rubles.

Salvage value calculation

To assess the liquidation value of the enterprise, it is necessary to collect information for the calculation, in this case use the balance sheet.

Let's assume that during the inventory, no assets not on the balance sheet of the enterprise were found, and the liquidation of all assets of the enterprise and the repayment of debts will take 12 months, inventory - 2 months.

The use of all equipment will be frozen, and therefore depreciation is not taken into account.

Discount rate calculation:

SC (III liabilities) = 1,044 165

DZ (loans and credits) = 185 733

SC + DZ = 1,229,898

According to the 2011 annual report, the company did not pay dividends this year, so Kd = ROE

ROE= (NP / average annual capital)* 100%

PE according to the income statement is 1,706

Average annual capital = (1,044,165 + 1,042,459)/2= 1,043 312

ROE= (1,706/ 1,043,312)* 100 = 0, 1635

WACC= 0, 1635*0, 15 + 0, 0825*0,85*(1-0,2)= 0.08

Calculate the gross salvage value of the company's assets:

PV of Cash = 123,299 (not discounted) Accounts Receivable = 443,510/((1+ 0.0825/12)^12)= 408,389

PV "TMZ" \u003d 0 / (1 + 0.0825 / 12) ^ 2 \u003d 0

Gross proceeds from liquidation of assets = 567,211

Imagine that the costs associated with the maintenance of assets before liquidation will be: for inventory - 3000 rubles. per month; administrative expenses for the liquidation of the company - 800 rubles / month. then

"TMZ" \u003d 3000 (1-1 / (1 + 0.0825 / 12) ^ 2) / 0.0825 / 12 \u003d 5934.5

"Administrative expenses" \u003d 800 (1-1 / (1 + 0.0825 / 12) ^ 12) / 0.0825 / 12 \u003d 9181

Liquidation costs = 15,115.5

Liquidation value of the enterprise = Gross proceeds from the liquidation of assets - Costs of liquidation - Accounts payable =

211- 15 115.5 - 328 561 = 223 534.5 thousand rubles.

Thus, the value of the Goldman Sachs LLC enterprise using the net asset method amounted to 1,044,165 thousand rubles, and by the liquidation method 223,534.5 thousand rubles. liquidation costs.

Conclusion

Based on the results of the research, the following conclusions can be drawn: the cost approach to business valuation is based on an analysis of the company's balance sheet, which makes it possible to form an objective assessment, and is also the most reliable in the conditions of an unstable Russian economy compared to income and comparative approaches to valuation, which is due to the availability of reliable initial information for the calculation, as well as the use of methods traditional for the domestic economy to assess the value of a business, based on an analysis of the value of the property of the enterprise and its debt.

In the course of solving the tasks set, the following conclusions can be drawn:

The cost approach involves the assessment of the enterprise in terms of the magnitude of its costs.

This approach to business valuation has a number of advantages and disadvantages. The main advantages are more substantiated evaluation results compared to other evaluation approaches.

The cost approach includes two main valuation techniques: the net asset method and the salvage value method.

The essence of enterprise valuation by the method of net assets is to determine the market value of all its assets: tangible, financial and intangible. The balance sheet value of the assets and liabilities of the enterprise due to inflation, changes in market conditions, the accounting methods used, as a rule, does not correspond to the market value. As a result, the question arises of adjusting the balance sheet of the enterprise. To do this, the fair market value of each asset of the balance sheet is assessed separately, then the current value of all its liabilities is determined, and the current value of all liabilities is subtracted from the reasonable market value of the total assets of the enterprise, since the buyer will not pay the obligations of the enterprise. The result of these calculations will show the market value of the enterprise within the framework of the cost approach.

The liquidation value method is used to value enterprises that are bankrupt or in the event of bankruptcy in the near future. The residual value shows how much cash will be left after the sale of assets and the repayment of direct costs and other expenses. The direct costs of the liquidation of an enterprise include commissions to consultants (appraisers, lawyers and other experts), taxes and fees from the sale. Other expenses include expenses associated with the possession of assets before their sale, etc.

Various scientific manuals and textbooks were used in the work.

In general, the work constitutes a holistic unified analysis of the concept of enterprise valuation by the cost approach, including the definition of the cost approach, the list of indicators and the calculation of the organization using the cost approach.

List of used literature

Order of the Ministry of Finance of the Russian Federation No. 10n, Federal Commission for the Securities Market of the Russian Federation No. 03-6 / nz dated January 21, 2003. "On approval of the procedure for assessing the value of net assets of joint-stock companies"

Vaslyaev N.A. Business valuation and valuation activities. Lecture notes. Priorizdat Publishing House 2008. P. 50

Valdaytsev S.V. Business valuation: textbook. Publishing house "Prospekt" 2006. S. 62

Prosvetov G.I. Business valuation: tasks and solutions. Teaching aid. Publishing house "Alpha" 2008. S. 98

Maslenkova O.F. Enterprise (business) valuation. Tutorial. KNORUS 2011. P. 24

Balakin V.V., Grigoriev V.V. Fundamentals of business valuation: educational and practical guide. Delo Publishing House 2009. P. 65

Esipova V.A., Makhovikova G.A. Business valuation: textbook. Publishing house "Peter" 2010. P.76

Galitskaya S.V., Financial management. The financial analysis. Enterprise finance. Textbook, 2008. S. 140

Berzon N.I., Financial management. Publishing Center "Academy", 2006. P.45

.#"justify">.#"justify">.#"justify">.#"justify"> Appendix

Table. Cash flows of OOO Goldman Sachs

Balans200920102011Osnovnye sredstva2265171461437Oborotnye sredstva799626758831632746510Itogo aktivov2867958061287712982422SK103148910424591044165DZ21659203824518185733KO598888542617941752524Itogo liabilities and SK2867958061287712982422

Profit and ubytkah200920102011Obem prodazh121674507Sebestoimost (expenses on core activities) 120303220Amortizatsiya43783Prochie raskhody1768641Pribyl before interest and tax (gross profit) 389175Protsenty1497537Pribyl before tax-647689Nalogi (20%) 3264Chistaya profit (retained earnings): - 537833Kapitalizatsiya profit (reflected in the balance sheet profit for the year ) Dividends (payments to owners)

Indicator200920102011Depreciation43783Earnings before interest and taxes (Gross profit)389175Taxes (20%)3264Operating cash flows429694Fixed assets at the end of the year20424948Fixed assets at the beginning of the year301998Depreciation43783Investments in fixed assets20166763Net working capital goda1498101Chisty at the end of the working capital at the beginning of goda622079Prirost (decrease) in net working kapitala879022Operatsionny cash potok429694Investitsii in basic sredstva20279853Prirost net working kapitala879022Denezhnye flows from the asset-20729181Uplachennye protsenty1497537Chistye new zaymy21149925Denezhny-stream lenders 19652388Vyplachennye dividendy0Chisty new equity-37833Denezhny aktsioneram37833Denezhnye stream flows from the asset-20729181Denezhny flow kreditoram- 19652388Cash flow to shareholders37833BALANCE of cash flows

Chapter 6

The business valuation procedure using the cost approach consists in identifying unrecorded (functioning and / or non-functioning) assets and revaluing all assets owned by the company at market value. Moreover, if the share of the business owned by shareholders is assessed, liabilities are deducted from the value of assets, also revalued at market value (the composition of which is also supplemented with unaccounted liabilities or encumbrances if they are discovered).
The cost approach described above is a well-established and generally accepted business valuation scheme. The result of this assessment is subsequently taken into account when forming an opinion on the final value of the business, together with the results of the assessment obtained by other approaches. It would seem that all this is quite correct and does not raise any doubts. Although, perhaps, certain doubts (“confusion and vacillation” in the minds) are almost always present, even in such a matter. This applies, for example, to an adequate assessment of intangible assets and goodwill of the company not recorded on the balance sheet. In this regard, the author of this publication wants to identify a number of factors that must be taken into account when evaluating a business using the cost approach.

Let's start with the company's goodwill. Usually goodwill is "attributed" the value obtained as the difference between the results of the income and comparative approaches, on the one hand, and the result of the cost approach, on the other hand. However, with such an assessment, the meaning is lost as a result of the cost approach, because its result, taking into account the goodwill assessed in this way, will always practically coincide with the results of other approaches. Therefore, it seems appropriate, within the framework of the cost approach, to evaluate the value of goodwill using a purely cost approach, regardless of other approaches. One of these ways can be interviewing marketing and PR specialists. Some of these high-class specialists can give an expert opinion on how much time and money it takes for a company “from scratch” to acquire a certain number of business counterparties (the number that the company being valued has) and effective recognition in the market in general, and among the target audience in particular, and also thoroughly studied the market of its products and consumers. If these costs are widely spread over time and there is strong inflation in the region, the costs of generating goodwill should be indexed. At the same time, since not all such investments turn out to be effective, and, in addition, such investments are subject to strong depreciation due to the effects of noise and "short consumer memory", these investments should also be amortized. Adjustments to investments in goodwill - indexation and amortization - partially offset each other, but still, as a rule (in the absence of hyperinflation), the effect of depreciation significantly exceeds the effect of inflation. The sum of the total adjusted costs of creating effective awareness, connections and reputation that the company being valued has should be interpreted as an estimate of the value of goodwill determined by the cost approach, and therefore, it must be added to the value of other assets of the company being valued.
Now let's move on to another issue related to business valuation using the cost approach. The cost approach itself operates with the concept of cost and the principle of substitution: if any object can somehow be created cheaper than the price offered for it by the seller-owner of the object, then this is the way to do it - create it yourself. If the costs of independent creation of the object exceed the price of the seller of the target object, or it is not possible to create this object on your own for some reason, the object, if necessary, it is advisable to buy on the market. With such a scheme, at least one nuance is overlooked, namely, the costs of missed opportunities. The application of the cost approach takes into account the time factor in the revaluation of assets and liabilities by indexing non-current assets and discounting a number of inventories and liabilities. However potential buyer, having decided, guided by the principle of substitution, to “build” a business on its own, will spend on this not only direct costs due to the purchase of assets at market value, but also opportunity costs - during the independent “building” of a business, the investor will lose the profit that he could receive if I would buy this business already functioning. In addition, it is also necessary to take into account the specific risks inherent in young companies when entering the market: by acquiring a ready-made business, the buyer-investor gets rid of the risks initial stage. The last thing to consider when forming an opinion about the market value of the business - the most likely transaction price between the seller and the buyer - is the discount that allows the buyer to benefit from the transaction. Let us immediately make a reservation that this discount is not a dogma, the buyer seeks to negotiate it during the bidding process, but it is not a fact that the seller will agree to provide it: if such a discount always existed, arbitration would operate, allowing you to “forge” money out of thin air, which quickly It would “eat up” the opportunity itself as such - everyone would rush to buy and sell ready-made businesses.
Taking into account the above, the adjusted value of a going concern, obtained on the basis of the cost approach, will be:

P \u003d W + G3 + SW + RP - ∆ (6.1)

where P is the cost of a functioning business,

Z - the value of the tangible and identified intangible assets (net assets) of the business, adjusted at market value, determined under the cost approach,

Gz - the cost of the company's goodwill, determined by the cost approach,
HC - the cost equivalent of lost profits arising from the shortfall in profits at the stage of establishing a business from scratch,
RP - the cost equivalent of the specific risks of the formation stage (exceeding the cost estimate, increased probability of full or partial loss of investment costs incurred),

∆ - bargaining discount.

It should be noted that the definition of business value according to (6.1) implies efficient operation with a certain positive profitability. If the business has just been created and does not bring profit to its owners, for a potential buyer of such a business there is no fundamental difference between buying such a business and creating it from scratch. Therefore, in such a situation, the SW and RP components in (6.1) will be close to zero. Of greatest interest in (6.1) are the Lost Profit Component (LC) and the Cost Equivalent of Emerging Specific Risks (RP).

Let's consider them in more detail. Planning to create a business from scratch to a certain stage can be divided into several stages: the stage of registering a company and acquiring assets, the stage of debugging, hiring and training personnel - until the start of the sale of finished products, the stage of reaching the breakeven level, and finally the stage of reaching the planned profitability Rп . If, for ease of consideration, the entire cycle of creating a business from scratch is divided into only two stages - the stage of no profit (t0, t1) and the stage of profit growth from zero to the planned level of profitability (t1, t2), then the cost equivalent of the lost profit can be estimated according to the following formula:

UV \u003d Z (t0, t1) x ((1 + Rn) to the power of ((t1-td1) / T) x (1 + Rn (1-k) to the power of ((t2-t1) / T) -1) +3(t1, t2) x ((1+Rn(1-k) to the power of ((t2-td2)/T)) -1) (6.2)

where З(t0, t1) - total costs incurred at stage (t0, t1),

Z(t1, t2) - total costs incurred at stage (t1, t2), moreover,

З(t0, t1)+ З(t1, t2) = З + Gз, (6.3)

Rp - planned level of profitability (profitability (ROE) ready business or analogue objects),

kRп – average level of profitability at the stage (t1, t2), 0< k < 1.

td1 is the duration of investments at the stage (t0, t1),

td2 is the duration of investments at the stage (t1, t2),

T is a time dimension factor that brings the exponent to a dimensionless form and reduces it (the exponent) to an annual interval,

t1 is the moment the company starts earning profit,

t2 - the moment the company reaches the planned level of profitability Rp.

The presence of the RP component in (6.1) from the point of view of the cost approach means the possibility of additional unforeseen expenses typical for the stage of initial formation (including additional HC costs that may arise due to the delay in passing by the business of certain intermediate sub-stages at the stage of formation). According to the author, the RP parameter can be estimated in two ways. First, one can focus on the cost equivalent of the risk premium for investing in small companies, given the fact that newly created companies, as a rule, are small companies. Secondly, it is possible to evaluate the difference in the statistics of bankruptcy of companies that are at the stage of formation and companies with an average statistical period for the market from the moment of formation to the current moment. Having obtained the value of the difference in bankruptcy probabilities, it should be transformed into a relative risk premium (an additional risk premium that reflects only the specific risks of a newly formed company), and then converted into an absolute (value) expression.

The modified cost approach presented above (let's call it that) is similar to the structure of the EBO and EVA models: here and there there are two components - the capital / invested capital component and the income component. However, unlike EBO and EVA, the modified cost approach limits the summation of income to the interval (t0, t2), which, under the condition of a positive return on equity, leads to a lower value of the business value compared to the valuation results obtained within the EBO/EVA model, but higher compared to the cost obtained using the traditional cost approach. That is, the use of a modified cost approach reduces the gap between the results of the assessment of cost and income approaches, and, consequently, increases the adequacy of the final assessment of the value of the business. If a potential buyer of a business evaluates the investment value of the target object, focusing on income approach, and at the same time he can convince the owner of the target to sell it at a price determined on the basis of the modified cost approach, the net present value of such a transaction will be positive for him.

test questions and tests and tasks

1. In what cases is it necessary to apply primarily a cost approach for real estate valuation?

2. Name the main stages of real estate appraisal by the cost approach.

3. Define replacement cost.

4. What methods of calculating replacement cost do you know?

5. What is the developer's profit and how does it differ from the contractor's profit?

6. Which method of calculating the replacement cost shows the most accurate results?

7. Are there conceptual differences between the terms “cost” and “costs”?

8. Describe the structure of the summary estimate.

9. What characterizes the depreciation of real estate?

10. Describe the main types of wear and methods for their calculation.

Which of the following is a cost approach?

1) net asset method;

2) capitalization method;

3) method of transactions;

4) arbitration method;

5) LIFO method

Choose the only correct definition of the time value of cash flows.

1) bringing the amounts of money arising in different time to a comparable species;

2) the length of time during which the assessment is made;

3) cash flow, which is estimated at given time;

4) everything is correct;

5) there is no correct answer

What is the cost approach to valuation?

1) analysis of the balance sheet accounts of the enterprise and their adjustment;

2) analysis of the practice of selling objects in the industry;

3) direct comparison of similar objects;

4) income and cost analysis

5) there is no correct answer

What does the technology of real estate appraisal by the cost method include?

1) all of the above stages

2) valuation of the land plot

3) estimate the cost of restoring or replacing improvements

4) deduction of accumulated wear improvements

5) summing up the value of the land plot and improvements

Tasks

1. Determine the total accumulated depreciation (% depreciation) of the property based on the following data:

The sale price of the object was 90,000;

· Based on the analysis of land sales, the site has an estimated value of 30,000;

The cost analysis shows that the total cost of reproducing the building is 110,000.

2. The following information is known.