Brief considerations on business valuation methods

Authors

  • Julio César Riascos Hermoza Universidad de Nariño
  • Jesús Enrique Molina Universidad de Los Andes

DOI:

https://doi.org/10.22267/rtend.171802.83

Keywords:

Valuation methods, business valuation, discounted cash flows

Abstract

Nowadays, determining the value of a business has gained significant importance in academic and business fields, as the understanding of the value of an organization has become a key tool for the management and marketing of a business. Accordingly, numerous methods have been developed in order to perform these kinds of practices.

In this article, the most used and current methods in processes of business evaluation are revised, observing their strengths and weaknesses, with the aim of comparing them and determining that the discounted cash flow methods are the most adequate procedures to perform this type of analysis.

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Author Biographies

Julio César Riascos Hermoza, Universidad de Nariño

Director of the Center for Regional and Business Development Studies at the University of Nariño. Economist, Master in Financial Management and Advisory. Econometrics Professor University of Nariño. GIDER Research Group, CES Research Group and Frontera Sur Research Group.

Jesús Enrique Molina, Universidad de Los Andes

Doctoral student in Management, Universidad de Los Andes. Economist, Master in Financial Management, EAFIT University.

References

(1) COOPER, Ian A. and DAVYDENKO, Sergei A. The Cost of Debt (March 8, 2001). Available at SSRN: https://ssrn.com/abstract=254974 or http://dx.doi.org/10.2139/ssrn.254974

(2) EHRHARDT, M., DAVES, P. (1999). The Adjusted Present Value: The Combined Impact of Growth and the Tax Shield of Debt on the Cost of Capital and Systematic Risk. University of Tennessee.

(3) FERNÁNDEZ, P. (2008). Valoración de Empresas Cómo medir y gestionar la creación de valor. Barcelona, España: Gestión 2000.

(4) PEREYRA, M. (2008). Valoración de empresas. Revisión de los métodos actuales. Documento de Trabajo Nro. 41 Facultad de Administración y Ciencias Sociales, Universidad ORT Uruguay.

(5) SARMIENTO & CAYON. (2005). Cálculo del costo del patrimonio desapalancado. Pontificia Universidad Javeriana. 1- 33.

(6) VÉLEZ PAREJA, I. (2006). Decisiones de Inversión para la Valoración financiera de proyectos y empresas. Bogotá, Colombia: Editorial Pontificia Universidad Javeriana.

(7) VÉLEZ PAREJA, I. THAM, J. (2012, 1 de Febrero), Una introducción al costo de capital. Tópicos en Valoración de Activos no financieros. Recuperado de http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1997065.

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Published

2017-11-24

How to Cite

Riascos Hermoza, J. C., & Molina, J. E. (2017). Brief considerations on business valuation methods. Tendencias, 18(2), 168–182. https://doi.org/10.22267/rtend.171802.83

Issue

Vol. 18 No. 2 (2017): Vol. XVIII No. 2 Segundo Semestre Julio - Diciembre 2018

Section

Review Articles

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