corporate value
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Answer the attached questions with at least five sentences each:
? Identify the differences between an internal estimate of company value and an external estimate of corporate value. Does access to managerial accounting data necessarily lead to better corporate value estimates than relying on publicly available information?
? Identify the key issues an analyst should consider when valuing start-up companies. How might an analyst resolve these issues?
? In terms of research and development, purchasing, and advertising, describe how the product compatibility of a corporation's business units might impact the value of the corporation.
? How might lack of product compatibility affect the realignment of a corporation's divisions?
? At what point in the incurrence of costs does the allocation of corporate costs lead to misleading results for the firm's business units? Indicate a few such costs.
? What are some of the corporate advantages in dealing with customers who shop at dot.coms?
? Assume that one of the earlier problems of dot.coms -- heavy startup costs involving substantial discontinuities -- is to some degree over. How should this impact the valuation process?
? What do you foresee in the future for dot.coms, and what does that imply for changes that must occur from the present time?
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? Identify the differences between an internal estimate of company value and an external estimate of corporate value. Does access to managerial accounting data necessarily lead to better corporate value estimates than relying on publicly available information?
An internal estimate of company value differs from that of an outside estimate because of several reasons. Internal estimate takes into account financial data, order position, contracts with suppliers, and the internal perception of the competitors. In addition, the internal estimate also takes into account the forecasts of sales, the relationship with investors and the human resource of the company. On the other hand the external estimates normally apply financial analysis of the company based on data available, the general economic conditions, examination of published financial reports and use an approach to company valuation. Managerial accounting data leads to far better corporate value estimates than reliance on public available data. Managerial accounting data gives latest information, information suitable for estimating the value of the company and valuable inside view about the company.
? Identify the key issues an analyst should consider when valuing start-up companies. How might an analyst resolve these issues?
An analyst should consider the value of a start up as close to what investors are valuing the startup. This is a market based approach but very valuable. Further, a financial analyst should consider the value of similar companies in the industry and those located close to the start-up. Next, the analyst should consider financial forecast of the sales and profitability of the startup. He should not just depend on the estimates given by the entrepreneur. Most importantly, the key issue that an analyst should consider when valuing start-up companies is that the company should be evaluated on its ability to be profitable. The challenge for the analyst is to look ...
Education
- BSc , University of Calcutta
- MBA, Eastern Institute for Integrated Learning in Management
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