ANALYSIS OF APPROACHES AND METHODS OF VALUATION OF THE ENTERPRISE

Abstract

Valuation of the enterprise is one of the main stages in the implementation of mergers and acquisitions. With the help of M&A, a business has the opportunity to develop, and if a business develops, then the industry in which the business operates develops. All this further contributes to the development of the national economy. That is why the assessment of the value of the enterprise is important both for the development of a particular enterprise and for understanding the development trends of the industry and the national and world economy as a whole. That is why choosing the right method and approach to assessing the value of the enterprise is important and relevant today. If you choose the right approach, the risks of overestimating or underestimating the value of the enterprise are minimized, due to such factors as: the nature of the market in which the company operates, the characteristics of the enterprise, its internal and external factors, the identified reason for evaluation. By assessing the value of the enterprise, the firm can identify the main factors that positively affect the value of the enterprise, which will positively affect the enterprise in the future, and for investors it can be a key indicator in making important decisions. The article considers the following methods and approaches: income (cash flow discounting method and method of determining the capitalized value of income), market (capital market method, transaction method and method of industry ratios) and cost (net asset value method, book value method, replacement cost method), liquidation value method and excess profit method). The main approaches, their essence, advantages and disadvantages of each approach, identified patterns of use of each approach and developed an algorithm for their application to assess enterprises based on their age, condition and existence of a developed market, which can greatly facilitate the selection of the required method. It also proposes a comprehensive method of estimating the value of the business based on the cost approach by calculating net assets using balance sheet data: value of fixed assets, current assets, goodwill and long-term and short-term liabilities and collateral.