Valuation is to calculate the appropriate stock price by comparing it with corporate value such as corporate assets and profits. So, what is it for valuation? We will do to judge investment implementation and to select the best and best projects from multiple projects. The way to conduct valuations varies with the income approach, the market approach, and the cost approach, but the market approach and cost approach are used in M & A of most Small Companies. The market approach is a method of estimating from the market price, that is, using the price in actual transactions or stock markets of companies or other peers in the same industry, and representative examples are the similar company comparative method, similar industrial comparative method there is. The similar company comparative method is a method of evaluating the net asset value, the profit amount, and the dividend amount based on the calculated stock price, based on the average stock price of a public company that is similar in size and type of industry to the company to be evaluated. Similar industrial comparative method is a method to calculate the stock price by adjusting the net asset value, the profit amount, and the payout amount of similar industries and companies to be evaluated based on the monthly average stock price by industry type announced by the National Tax Agency, and to evaluate it accordingly is.
What is the cost approach
The cost approach is an approach based on the net asset value, and it is a method to calculate business value and corporate value by evaluating the company’s property value at a certain point. The typical one is the market value net asset price method with the corporate value of the company’s holding value less the liability from the market price of the assets held by the company. Today, many small and medium enterprises are in financial difficulties due to long-term recession. Many companies are trying to survive frequently by restructuring and cost reduction, but in the end, there are companies that are being driven to bankruptcy. Even cases where major companies are absorbed and merged are increasing. The problem of management difficulties seems not to be a problem only for small companies. For that reason, there are many companies that make use of M & A, and knowledge on M & A, especially knowledge on company sale, is a necessary knowledge for management.