A Paradigm Shift in Business Valuation Process Using Fuzzy Logic

This research aims to develop a model that is able to integrate and objectify information provided by the different business valuation methods, incorporating quality management in its formal approach, which to date has not been considered in the literature about business valuation or quality management. Firstly, the company is valued using the methods which best adapt to its specific characteristics. Because of the subjectivity inherent in any valuation process, the results will be expressed through Triangular Fuzzy Numbers (TFN). These Fuzzy Numbers will be aggregated and summarized by applying Basic Defuzzification Distribution Uncertain Probabilistic Ordered Weighted Averaging operator (BADD-UPOWA). The weighting factors will be: the degree of confidence in each of the business valuation methods applied, and the innovative use of the company’s position on Crosby’s Quality Administration Grid. The results from application of the model in a case study show a significant reduction in uncertainty in contrast to the initial valuations. Moreover, the proposed methodology is seen to increase the final value of the company as its advances in quality management.

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The Role Of Due Diligence In The Business Valuation Process

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v5i5.2545 ◽

2011 ◽

Vol 5 (5) ◽

Author(s):

Terry Mullins ◽

Barry Thornton ◽

Michael Adams

Keyword(s):

Due Diligence ◽

Font Size ◽

Business Valuation ◽

Prospective Buyer ◽

Valuation Process ◽

Privately Held

The due diligence process enables investors to do a better job of determining the appropriate price to pay for a privately held firm.  This article delineates some factors that a prospective buyer should investigate thoroughly to determine the value of a small, privately held business under consideration for purchase.

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Business Valuation

10.36198/9783838555201 ◽

2021 ◽

Author(s):

Manfred Jürgen Matschke ◽

Gerrit Brösel

Keyword(s):

Data Acquisition ◽

Financial Crises ◽

Learning Goals ◽

Major Step ◽

Business Valuation ◽

A Value ◽

Self Study ◽

Valuation Process ◽

Three Stages

And assigns them to the relevant function of business valuation. Breaking down business valuation into three stages is a major step toward improving the transparency of the process. The steps introduced in this book are 1. Determination of relevant data acquisition, 2. Transformation of relevant data in a value, 3. Use of the determined value. A key aspect of this textbook is its analysis of the valuation process from the perspective of both buyer and seller. Ultimately, the book will present readers with the key principles of functional business valuation, which if it had been applied more widely, the authors argue, could have mitigated the severity of at least some recent financial crises. The book offers students, researchers, and practitioners interested in or involved in valuation clearly formulated learning goals and selected control questions. The systematic concept outlined also makes the book very well suited for self-study.

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Significance of Fuzzy Logic

10.1093/oso/9780190200015.003.0007 ◽

2017 ◽

Author(s):

Radim Bělohlávek ◽

Joseph W. Dauben ◽

George J. Klir

Keyword(s):

Fuzzy Logic ◽

Paradigm Shift ◽

General Purpose ◽

Future Prospects

The aim of this chapter is to assess the significance of fuzzy logic based on its developments and its impact on mathematics and other areas of human affairs over its fifty-year history. For this purpose, the well-established concepts of a paradigm and a paradigm shift in science as well as their counterparts in mathematics and other areas of human affairs are employed as useful metaphors. Authors’ views regarding future prospects of fuzzy logic are also discussed. The prospects for a wider awareness of fuzzy logic depend on the development of specialist forums for discussion of its application, as well as on the availability of general-purpose textbooks. Fuzzy logic offers contributions to thinking about a large number of disciplines, and their acceptance will depend on how well the claims made for it materialize.

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American Society of Appraisers Business Valuation Committee Special Topics Paper #5 Consideration of Stock-Based Compensation in the Valuation Process

Business Valuation Review ◽

10.5791/0882-2875-37.2.51 ◽

2018 ◽

Vol 37 (2) ◽

pp. 51-55

Keyword(s):

Business Valuation ◽

Valuation Process ◽

American Society

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Philip Fisher’s sense of numbers

Qualitative Research in Financial Markets ◽

10.1108/qrfm-01-2013-0004 ◽

2014 ◽

Vol 6 (3) ◽

pp. 302-331 ◽

Cited By ~ 1

Author(s):

Carlo Massironi

Keyword(s):

Conceptual Analysis ◽

Equity Valuation ◽

Individual Investors ◽

Content Type ◽

Business Valuation ◽

Valuation Model ◽

Valuation Process ◽

Qualitative Models ◽

Decision Making Processes ◽

The Subject

Purpose – This paper aims to propose an account of the use of numbers and mathematical formulae and, more generally, of the quantitative aspects in the qualitative equity valuation model of the American investor Philip A. Fisher who is considered to be one of the fathers of the qualitative equity valuation models. Design/methodology/approach – A Conceptual analysis was conducted (Glasersfeld, 1992) of the four volumes published by Fisher between 1954 and 1980 (1958, 1960, 1975, 1980) in relation to his equity valuation process. On the basis of this analysis, a modelization of this author’s perspective on quantitative instruments was built. Findings – A modelization to use quantitative data in a qualitative equity valuation model that is sufficiently detailed and useful for an asset manager is proposed. Originality/value – What is propose is a qualitative analysis of quantitative elements in the thought of a qualitative author on the subject of equity valuation. It is believed that this paper could be of interest to all those who use or are involved in the development of qualitative models of equity valuation or business valuation. This work is also an example of how conceptual analysis – generally employed in the field of mathematics education research – can be used to build descriptive models of decision-making processes of individual investors, models designed to enable the reproduction/approximation of the conceptual operations of the investor.

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Paradigm shift - an introduction to fuzzy logic

IEEE Potentials ◽

10.1109/mp.2006.1635021 ◽

2006 ◽

Vol 25 (1) ◽

pp. 6-21 ◽

Cited By ~ 25

Author(s):

J. Bih

Keyword(s):

Fuzzy Logic ◽

Paradigm Shift

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Introduction to Business Valuation

Advances in Business Information Systems and Analytics - Valuation Challenges and Solutions in Contemporary Businesses ◽

10.4018/978-1-7998-1086-5.ch001 ◽

2020 ◽

pp. 1-23

Author(s):

Sinem Derindere Köseoğlu ◽

Saad Salman Awad Almeany

Keyword(s):

Intrinsic Value ◽

Financial Statements ◽

Fair Value ◽

Firm Valuation ◽

Free Cash Flow ◽

Value Drivers ◽

Business Valuation ◽

Equity Value ◽

Different Types ◽

Valuation Process

This chapter is an introduction to the book and provides basic information to help readers in the following chapters. This book analyzes all kinds of problems and develops solutions in firm valuation process. The needs and purposes of firm valuation are briefly explained. Basic Concepts, such as Cost, Price, Value, Valuation, Evaluation, Free Cash Flow, and different types of value, are explained. Face value, issue price, fair value, intrinsic value, market value, book value, going-concern value, liquidation value, replacement value, enterprise value, and equity value are explained within the different types of value. Then, “financial statements” and “elements of financial statements”, which will form the basis of all valuation approaches, are explained and emphasized. The value drivers for businesses are discussed. Business valuation approaches' general features are given.

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