Valuation Fundamentals and CFD Case

Presented by Julián Andrés Maya

According to the information provided, the following is requested:

1. Calculate the following business valuation methods (6 points):

o Static

A) Value Accountant
B) ValueAdjusted Accounting
C) Value of Liquidation
D) Market capitalization

R/

A) Calculation of book value: It will be calculated in two different ways with the same result, the
first as the value of the Shareholders' Equity shown in the Balance Sheet. Or else, as the
difference between the.

equity, which could be defined as the real book value of the company, would be the difference
between liabilities and assets.

Generally the formula is: assets and liabilities due Book Value = C + R = A - PE

For the case presented the book value is: €9.002.608

B) Adjusted Book Value

It will be calculated as assets less liabilities payable strictly considering market values; if
market values are not known, it will be assumed that the best approximation is the book value.
VCA = Am - PE

Total assets at market prices = € 16,170,166 (Am)

Liabilities payable (PE) = € 6,374,393
ACF= € 9,795,173

C) Liquidation value
The closing value or liquidation value of a company is the value of the company assuming the
closing of the company and selling its assets immediately at market prices to meet the
obligations existing prior to its closing.

VL = € 288,160.75
2. Perform an analysis and comparison of results (4 points):

a. Prepare a graph with the results obtained.

b. Select the most appropriate method to determine the value of this company.

By carefully observing the data we realize that the book value is: € 9,002,608, being this
equal to the net worth, by calculating the adjusted book value with the data provided we
realize that the result is € 9,795. 173, giving us a better valuation than the initial one, when
looking at the liquidation value this would be € 288,160.75, this given by the loss of value
of the total assets adjusted to market values by 45% and an increase of 35% of the
demandable liabilities adjusted to the value of the liquidation and expenses, which as a
result shows a considerable loss of value of the company if this situation were to arise,
given the above, it would be optimal to value at adjusted book value.

ENTERPRISE VALUE USING THREE METHODS

12.000.000

10.000.000

8.000.000

6.000.000

4.000.000

2.000.000

0
BOOK VALUE ADJUSTED BOOK VALUE OF
VALUE LIQUIDATION

Note: consideration with the case, it is likely that I did not understand the module or its
information, I could not calculate the market capitalization as I did not know the share price
and I did not find in the module an example that could serve me as a guide or reference and
in the information that I found I needed the price of the share, information that I do not
have in the supplied material.