AD ALTA
JOURNAL OF INTERDISCIPLINARY RESEARCH
í µí°»= �
í µí°¹í µí°¶í µí°¹í µí°¸
í µí±¡
(1+í µí±›
í µí±‰í µí°¾(í µí±§)í µí±–
)
í µí±¡
í µí±‡
í µí±¡=1
(2)
Where:
H
business value,
FCFE
t
N
Free cash flow to equity in year t,
VK(z)i
cost of equity at specific debt in year i.
Subsequently, the second stage of the DCF method will be
calculated using Formula 3.
í µí±ƒí µí°»=
í µí°¹í µí°¶í µí°¹í µí°¸
í µí±‡+1
í µí±›
í µí±‰í µí°¾(í µí±§)í µí±‡+í µí±–
âˆ’í µí±”âˆ—
1
(1+í µí±›
í µí±‰í µí°¾(í µí±§)í µí±–
)
í µí±‡
(3)
Where:
T
years in the first stage,
g
growth in the second stage.
The value of the association XYZ´s intangible assets will be
determined by calculating the difference between the asset-based
and income-based valuation method.
4 Results
For the purposes of this contribution, it was necessary to assess
the development of Industrial Production Index in the Czech
Republic. Figure 2 shows its development for the manufacturing
industry at constant prices (bacic index, average in the year 2010
= 100) released by the CSO.
Figure 2: Development of Industrial Production Index for
manufacturing industry (in %)
Source: CSU, 2020.
Figure 2 clearly shows that in mid-2017, the Industrial
Production Index for the manufacturing industry achieved the
highest values in the past three years, and compared to the base
year 2010, there was an increase to 140%. However, in the
period preceding the valuation date, the value of the index
decreased to 127%.
Subsequently, according to the financial statements provided by
the model association XYZ, its financial health was analysed by
the difference of its income and expense items. The difference of
the income and expense accounting items is shown in Table 3.
Table 3: Difference of income and expense accounting items of
association XYZ (in CZK)
Accounting
period
2012
2013
2014
2015
2016
2017
Incomes
3,782,922 3,827,332 4,651,051 5,800,337 7,288,916 3,782,922
Expenses
3,336,552 3,475,784 4,329,146 5,506,796 6,081,950 3,336,552
Difference
446,370
351,548
321,905
293,541 1,206,966 446,370
Source: Authors.
Table 3 clearly shows that the difference between the income
and expense accounting items was almost constant in the years
2012–2015 and 2017. In 2016, there has been a significant
fluctuation caused by the increase in investments in the
equipment of new production premises where the model
association XYZ operated.
Based on the comparing the results of the development of the
Industrial Production Index and selected accounting indicators of
the model association XYZ, it can be stated that the model
association XYZ is a financially sound company without any
significant hidden threats. The transformation of its legal form
into a limited liability company is thus possible, and the future of
the model association XYZ should not be affected by this
transformation.
Next, the value of the model association XYZ’s inventory was
determined. On the basis of the list of inventory provided by the
model association XYZ, its value was determined by the sum of
its purchasing prices to CZK 992,471.65.
Another step consisted of reviewing the receivables of the model
association XYZ. It was found out that the model association
XYZ has receivables totalling CZK 358,273.78 as of the
valuation date (31 December 2017). At the same time, one
irrecoverable receivable was identified at the amount of CZK
13,468.43. After deducting this receivable, the total amount of
the association XYZ´s receivables was determined CZK
344,805.35 (358,273.78 CZK – 13,468.43 CZK = 344,805.35
CZK).
Another item valued using the asset-based valuation method is
outstanding liabilities of the model association XYZ as of the
valuation date (31 December 2017). Based on all invoices
provided by the model association XYZ as a part of all data
provided for the purposes of this contribution, the value of all
liabilities as of the valuation date was determined at CZK
563,409.06.
Subsequently, the model association XYZ´s vehicle fleet was
valued in order to determine the value of its asset and thus the
value of its intangible asset. The overall value of the vehicle fleet
was determined at CZK 1,275,141 using the software CabiCAT
GT as of the valuation date.
The last item to be valued using the asset-based valuation
method is the property where the production premises in which
the model association XYZ operates are situated. It is one
property (a house) which is partly used as residential premises
and partly as production premises of the model association XYZ.
In order to determine the usual price of the given property,
similar properties offered for ssale via real estate advertising
servers were found. Table 4 represents a list of similar properties
for the purposes of comparison. The bid prices of such properties
were converted into the unit price by their floor area. The last
item to be valued by the property valuation method is
Table 4: List of properties found for comparison
Bid number
Bid price [CZK]
Build-up floor area
in m
Unit price CZK/m
2
2
1
3,650,000
170
21,534
2
4,650,000
204
22,794
3
5,300,000
258
20,511
4
2,900,000
156
18,590
Source: Authors.
Subsequently, the unit prices of the properties found were
modified using the aforementioned coefficients K
1
- K
5
. Table 5
shows the unit price and the modified unit price of the similar
properties found.
Table 5: Modified unit prices of the properties found for the
purposes of comparison by the values of the coefficients K
1
- K
Bid number
5
K
K
1
K
2
K
3
K
4
Modified unit
price CZK/m
5
2
1
0.95
1.00
0.95
1.05
0.98
19,998
2
0.95
1.00
1.00
0.92
1.05
20,918
3
1.00
1.00
0.90
1.07
1.08
21,332
4
1.00
1.05
0.95
1.12
0.95
19,730
Source: Authors.
On the basis of Table 5, there was determined the median of the
modified unit prices for m
2
. The median of modified unit prices
is 20,458 CZK/m
2
. Based on the floor area of the property partly
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