FAQ

The system proposes the joining of the developed value-adding variables into quadrants.

The proposed groupings are Human, Processes, Structural and Relational.

The time covered by the method are past, present and future series.

The variables are measured in quantitative and qualitative terms.

It also importante that valuation are produced by the interactivity between the quadrants. Also, the method proposes the joining of the developed value-adding variables.

The quadrants should be observed from two perspectives: internal and external.

A generation component of valuation is the potential for wealth creation that is strongly connected with both people and the market.

Thus, to determine the real value of the organization, follow the formulation:

RBV = KA + EMV

Where: RBV = Real Business Value, KA = Knowledge Assets and EMV = Equity at Market Value.

To determine the real value of the organization it is necessary to apply the formula in two steps. First find the actual value of knowledge assets (KA) and then add it to equity at market value.

To determine the real value of knowledge assets, step 1 of the proposed formula we have:

KA = (CAR + VAI) × (1 + VCA)

Where: KA = Knowledge Assets; CAR = Comprehensive Assessment Result; VAI = Value-Adding Investment and VCA = Valuation Coefficient Assessment.

Step 1 of the formulation KA = (CAR+ VAI) × (1 + VCA) was designed to assess the organization’s real value with an emphasis on value-added knowledge assets.

In step 2, it is necessary to determine Equity at Market Value (EMV) as follows:

EMV = AMV + LPV

Where: AMV = Assets at Market Value and LPV = Liabilities at Present Value.

The components of the formula have unfolding that are systematized and explained in detail in topics 9.1 Comprehensive Assessment Result (CAR), 9.2 Value-Adding Investment  (VAI) and 9.3 Valuation Coefficient Assessment (VCA) in Valuation: Real Business Value book.

See more about Valuation Real Business Value

Valuation is  useful in assessing the impact of strategies on firm value. By understanding how strategic decisions affect company value, managers can make smarter decisions and ensure the company is moving in the right direction.

The evaluation of companies is a strategic process and presents multiple uses, such as:

1. valuation for the purpose of merger or acquisition;
2. identification of investment and decisions opportunities;
3. evaluation of the impact of strategies on company value;
4. find where, how, with what, to whom, and by whom the wealth generated.

In a competitive environment, added values are a source of sustainable advantages. The added value can and should be measured, providing negotiation conditions with financiers, and attracting investor resources. They usually represent the largest part of the Valuation and are intangible, represented by assets and rights associated with an organization. Regardless of whether they are accounted for, they have value and can add competitive advantages, as is the case with a brand.

The valuation of companies is a critical process for any business and has several uses. One of the main ones is valuation for merger or acquisition purposes. When two companies want to merge or one company wants to acquire another, valuation is critical in determining the fair value of the transaction.

Another important utility is the identification of investment opportunities. By assessing a company’s current value and growth potential, investors can make informed decisions about where to put their money and get the best possible return.