The aim of this work is to examine the main methods used to define the corporate value considering the circumstance of a change in the decision-making owner. Specifically, the focus is on the appraisal of the Small and Medium-sized Enterprises in order to define the most appropriate evaluation methods. The findings of this work are based on an analysis of 70 cases, which span the period from 1978 to 2012. The results show that cash flow discounting-based methods are not used to evaluate SMEs. SMEs are characterized by a mix between the entrepreneur’s personal variables and the firm’s objective features. Thus, the process of valuation should take account of these two components, since both contribute to determining a business value. In fact, the firm value, that depends directly on the entrepreneur, is likely to run out in a short period of time in the event of changing the decision-making owner.
The valuation of small and medium-sized enterprises
PALAZZI, FEDERICA
2014
Abstract
The aim of this work is to examine the main methods used to define the corporate value considering the circumstance of a change in the decision-making owner. Specifically, the focus is on the appraisal of the Small and Medium-sized Enterprises in order to define the most appropriate evaluation methods. The findings of this work are based on an analysis of 70 cases, which span the period from 1978 to 2012. The results show that cash flow discounting-based methods are not used to evaluate SMEs. SMEs are characterized by a mix between the entrepreneur’s personal variables and the firm’s objective features. Thus, the process of valuation should take account of these two components, since both contribute to determining a business value. In fact, the firm value, that depends directly on the entrepreneur, is likely to run out in a short period of time in the event of changing the decision-making owner.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
