scholarly journals Brand valuation: an innovative approach based on the risk difference

2021 ◽  
Vol 12 (1) ◽  
pp. 159-191
Author(s):  
Roman Skalický ◽  
Tomáš Meluzín ◽  
Marek Zinecker
Keyword(s):  
Thought Experiment ◽  
Methodological Approach ◽  
Balance Sheet ◽  
Value Added ◽  
Risk Difference ◽  
Brand Valuation ◽  
Study Approach ◽  
Valuation Method ◽  
Valuation Process ◽  
The Difference

Research background: Among academicians, a growing interest in brand valuation methods can be observed since the 1980s, when it became obvious that firms have off-balance sheet assets which have a significant effect on their value. Moreover, in a number of cases, the need to value the brand arises due to the reporting requirements or transactional and other intrafirm reasons. The existing methods used so far have commonly focused on changes in variables such as sale prices, changes in customer behaviour, or sales volumes and very often lead to different results, even when valuing the same brand. We believe that the risk factor has been neglected in these methods, although having a significant impact on the brand valuation. Purpose of the article: The aim of this paper is to formulate an alternative brand valuation approach based on the risk difference. This is defined as the difference between the risk to which a producer with a certain brand is exposed and the risk of the producer without a brand. Methods: Firstly, a set of assumptions was defined concerning the issue what conditions are required to be applied to use the proposed methodological approach. Next, the concept itself is formulated and tested while using the case study approach. Hence, in conditions of a model company, the method was verified with specific data. The results were also compared with the reproduction cost approach. Findings & value added: This paper presents a novel brand valuation method based on the risk difference. Building on a thought experiment, we compare an incumbent with a brand rather than with an average producer, which is a commonly used approach, with a new entrant to the market. We argue that in comparison to existing methods, our methodological approach reduces the number of unobservable inputs in the brand valuation process, and thus increases the accuracy and reliability of its results. Our method supports both researchers and practitioners to establish a better understanding between the well-established financial theories and new directions in brand valuation research.

scholarly journals CONCEPT OF “HIDDEN ASSETS” AND METHODOLOGICAL BASES FOR THEIR ASSESSMENT

2020 ◽  
Vol 6 (5) ◽  
pp. 54-63
Author(s):  
Borys Burkynskyi ◽  
Valeriy Goryachuk ◽  
Julia Nazarenko
Keyword(s):  
Development Strategy ◽  
Methodological Approach ◽  
Balance Sheet ◽  
Value Added ◽  
Economic Benefits ◽  
Point Of View ◽  
Methodological Approaches ◽  
The Difference ◽  
Definition Of ◽  
The Right

To assess the prospects of an enterprise and plan its activities, it is very important to know what assets it has, including hidden assets. Today, there is no single understanding of this concept. Some researchers attribute this to an underestimation of the company’s assets, others – to a lack of accounting for assets, or to insufficient use of assets. This is the result of applying various methodological approaches and insufficient research of this concept. On the ground of a methodological approach based on the identification of generic concepts and essential features, a generalized definition of the concept of “hidden assets” is proposed. These are assets, value of which on the company’s balance sheet is undervalued compared to their real value, or which are not reflected in the balance sheet, or which are underutilized and which are real assets, and which are capable to provide a competitive advantage or economic benefit. This definition of the concept of “hidden assets” allows to combine different existing points of view on this concept and to look at the capital of an enterprise in a broader context. The difference between the concepts of “hidden assets” and “accounted assets” from the point of view of law is considered separately. Assets that are recorded in the balance sheet belong to the enterprise based on ownership rights. As for hidden assets, as a rule, the enterprise in relation to them has the right to use only. Firstly, this applies to the leased fixed assets, human capital (use of time, knowledge and skills of specialists). In other words, the right to use is of crucial importance. In this case, the assets of the enterprise are considered as a set of rights to receive economic benefits. With such a broad view, the components of the hidden capital of an enterprise can be identified. Analysis of existing methodological approaches to the assessment of hidden assets has shown that they have significant methodological shortcomings and difficulties in applying and collecting the necessary initial data. Methodological bases for estimation of hidden assets are proposed based on the defined concept of “public value of an enterprise” as the sum of all assets used by an enterprise to create gross value added. Calculations have shown that the average share of hidden assets of Ukrainian enterprises in the period from 2012 to 2018 in the total volume of all assets is 33.7 %, and by type of economic activity from 14.3 % in construction to 70.1 % in agriculture. Hidden assets are the missing link in determining the level of capitalization of an enterprise. All other things being equal, the difference in the level of economic development of enterprises can be explained by differences in the volume and structure of their hidden assets. Hidden assets can be the key to creation of an enterprise’s development strategy.

scholarly journals Accounting for equity investments under IFRS 13: Are market multiple evaluations accurate?

2021 ◽  
Vol 18 (4) ◽  
pp. 152-174
Author(s):  
Alessandro Migliavacca ◽  
Christian Rainero ◽  
Vera Palea
Keyword(s):  
Investment Decision ◽  
Balance Sheet ◽  
Fair Value ◽  
Equity Investment ◽  
Enterprise Value ◽  
Valuation Method ◽  
Accounting Principles ◽  
Investment Decision Making ◽  
Income Statement ◽  
Valuation Process

In capital markets, the investment decision-making process is vastly influenced by accounting information. This paper addresses equity investment valuation through market multiples and its consequences in investors’ financial statements under fair value accounting principles. After replicating the valuation process through the most used market multiples (price-to-forecasted earnings; market-to-book; enterprise-value-to-performance indicators), the authors analyze the distribution of the estimated-to-actual fair value ratio under the IFRS 13 perspective and the effects of a randomly selected portfolio on the balance sheet and income statement of the investor. The study’s primary findings are that the market multiples tend to produce consistent results in 7 (at least) to 20 (at best) out of 100 cases, and over or underestimate the fair value in all the remaining cases without any apparent or predictable reason. The results of the paper confirm what previous literature underlined by studies conducted on older data and with a different geographical scope (Kim & Ritter, 1999; Lie & Lie, 2002; Palea & Maino, 2013). The results and the literature suggest being particularly cautious in applying the market multiples valuation method for estimating the fair value of an equity investment, given the preference that accounting principles accord to the Level 2 market-comparable methods, which also seem to be the most used ones in practice

Translocation Relative to Range

Methodology ◽  
2008 ◽  
Vol 4 (3) ◽  
pp. 132-138 ◽  
Author(s):  
Michael Höfler
Keyword(s):  
Risk Difference ◽  
Binary Outcomes ◽  
Number Needed To Treat ◽  
Likert Scales ◽  
Psychological Science ◽  
The Absolute ◽  
The Difference ◽  
Variance Parameters ◽  
Standardized Index ◽  
Maximum Possible Magnitude

A standardized index for effect intensity, the translocation relative to range (TRR), is discussed. TRR is defined as the difference between the expectations of an outcome under two conditions (the absolute increment) divided by the maximum possible amount for that difference. TRR measures the shift caused by a factor relative to the maximum possible magnitude of that shift. For binary outcomes, TRR simply equals the risk difference, also known as the inverse number needed to treat. TRR ranges from –1 to 1 but is – unlike a correlation coefficient – a measure for effect intensity, because it does not rely on variance parameters in a certain population as do effect size measures (e.g., correlations, Cohen’s d). However, the use of TRR is restricted on outcomes with fixed and meaningful endpoints given, for instance, for meaningful psychological questionnaires or Likert scales. The use of TRR vs. Cohen’s d is illustrated with three examples from Psychological Science 2006 (issues 5 through 8). It is argued that, whenever TRR applies, it should complement Cohen’s d to avoid the problems related to the latter. In any case, the absolute increment should complement d.

Analisis Kinerja Keuangan Perusahaan dengan Menggunakan Pendekatan Economic Value Added (EVA) dan Market Value Added (MVA) (Studi Kasus pada PT Astra International, Tbk. Periode Tahun 20082012)

2017 ◽  
Vol 1 (1) ◽  
Author(s):  
Abdul Hamid
Keyword(s):  
Financial Performance ◽  
Financial Services ◽  
Stock Price ◽  
Economic Value ◽  
Composite Index ◽  
Value Added ◽  
Secondary Data ◽  
Study Approach ◽  
Market Value Added ◽  
The Interest Rate

This study is a qualitative study using a case study approach to the PT. Astra International, Tbk. The object of this research is PT. Astra International, Tbk. PT. Astra International, Tbk is a company engaged in six business sectors, namely: automotive,financial services, heavy equipment, mining and energy, agribusiness, information technology, infrastructure and logistics. Researchers chose PT. Astra International, Tbk as research objects due in the year 2012, PT. Astra International, Tbk managed to rank first in the list of 100 Best Companies to Go Public by the 2011 financial performance of Fortune magazines Indonesia. The data used in this research is secondary data, the financial statements. Astra International, Tbk 20082012. Other secondary data used is the interest rate of Bank Indonesia Certificates (SBI), the Jakarta Composite Index (JCI), and thecompanys stock price began the year 20082012. This study aims to determine the companys financial performance by the use of EVA and MVA approach, therefore the data analysis technique used is the EVA and MVA. Based on the value EVA of the year 2008 2012, PT. Astra International, Tbk has good financial performance that managed to meet the expectations of the company and the investors. Based on the value of MVA during the years 20082012, PT. Astra International, Tbk managed to create wealth and prosperity for companies and investors. It concluded that financial performance. AstraInternational, Tbk for five years was satisfactory.

scholarly journals The Social Balance Sheet as Part of the Annual Report in Financial Institutions. A Case Study: Banco Bilbao Vizcaya Argentaria (BBVA)

2021 ◽  
Vol 13 (6) ◽  
pp. 3075
Author(s):  
Miguel Ángel Martín Valmayor ◽  
Beatriz Duarte Monedero ◽  
Luis A. Gil-Alana
Keyword(s):  
Annual Report ◽  
Economic Value ◽  
Balance Sheet ◽  
Value Added ◽  
Social Value ◽  
Economic Value Added ◽  
The Social ◽  
Social Balance ◽  
Corporate Social

In this paper, we examine the concept of the social balance sheet (SBS) and its evolution in corporate social reports that large companies have to issue today in their yearly statements. The SBS allows companies to evaluate their compliance with corporate social responsibility during a specific period and quantify its level of accomplishment. From a methodological perspective, this research analyzed the information that should be contained in the SBS report comparing economic value added (EVA) with other social value added statements (SVA), analyzing also in detail the case of Spain’s Banco Bilbao Vizcaya Argentaria (BBVA) bank as one of the pioneers in offering social reports. Along with this study, their metrics following EVA were recalculated and a more academic SVA statement was proposed for this specific case.

scholarly journals Natural Science and Supernatural Thought Experiments

Religions ◽  
2019 ◽  
Vol 10 (6) ◽  
pp. 389
Author(s):  
James Robert Brown
Keyword(s):  
Natural Science ◽  
Thought Experiment ◽  
Thought Experiments ◽  
The Other ◽  
Space And Time ◽  
Wide Range ◽  
The Difference ◽  
Theological Thought

Religious notions have long played a role in epistemology. Theological thought experiments, in particular, have been effective in a wide range of situations in the sciences. Some of these are merely picturesque, others have been heuristically important, and still others, as I will argue, have played a role that could be called essential. I will illustrate the difference between heuristic and essential with two examples. One of these stems from the Newton–Leibniz debate over the nature of space and time; the other is a thought experiment of my own constructed with the aim of making a case for a more liberal view of evidence in mathematics.

Pricing spread options by generalized bivariate edgeworth expansion

2017 ◽  
Vol 04 (02n03) ◽  
pp. 1750017
Author(s):  
Edward P. C. Kao ◽  
Weiwei Xie
Keyword(s):  
Edgeworth Expansion ◽  
Price Difference ◽  
Empirical Estimation ◽  
Strike Price ◽  
Closed Form Solutions ◽  
Spread Options ◽  
Valuation Process ◽  
The Difference ◽  
Spread Option ◽  
Underlying Processes

A spread option is a contingent claim whose underlying is the price difference between two assets. For a call, the holder of the option receives the difference, if positive, between the price difference and the strike price. Otherwise, the holder receives nothing. Spread options trade in large volume in financial, fixed-income, commodity, and energy industries. It is well known that pricing of spread options does not admit closed-form solutions even under a geometric Brownian motion paradigm. When price dynamics experience stochastic volatilities and/or jumps, the valuation process becomes more challenging. Following the seminal work of Jarrow and Judd, we propose the use of Edgeworth expansion to approximate the call price. In the spirit of Pearson, we reduce the cumbersome computation inherent in Edgeworth expansion to single numerical integrations. For an arbitrary bivariate price process, we show that once its product cumulants are available, either by virtue of the structural properties of the underlying processes or by empirical estimation using market data, the approach enables analysts to approximate the call price easily. Specifically, the call prices so estimated capture the correlation, skewness, and kurtosis of the two underlying price processes. As such, the approach is useful for approximate valuations based on Lévy-based models.

Analysis and Reduction of the Waste in the Work Process Using Time Study Analysis: A Case Study

2014 ◽  
Vol 660 ◽  
pp. 971-975 ◽  
Author(s):  
Mohd Norzaim bin Che Ani ◽  
Siti Aisyah Binti Abdul Hamid
Keyword(s):  
Cycle Time ◽  
Lean Manufacturing ◽  
Value Added ◽  
Time Study ◽  
Study Approach ◽  
Root Cause ◽  
Wide Range ◽  
Unit Of Work ◽  
Time Required ◽  
The Impact

Time study is the process of observation which concerned with the determination of the amount of time required to perform a unit of work involves of internal, external and machine time elements. Originally, time study was first starting to be used in Europe since 1760s in manufacturing fields. It is the flexible technique in lean manufacturing and suitable for a wide range of situations. Time study approach that enable of reducing or minimizing ‘non-value added activities’ in the process cycle time which contribute to bottleneck time. The impact on improving process cycle time for organization that it was increasing the productivity and reduce cost. This project paper focusing on time study at selected processes with bottleneck time and identify the possible root cause which was contribute to high time required to perform a unit of work.

Hybrid Technology of Hard Coal Mining from Seams Located at Great Depths

2014 ◽  
Vol 59 (3) ◽  
pp. 575-590 ◽  
Author(s):  
Piotr Czaja ◽  
Paweł Kamiński ◽  
Jerzy Klich ◽  
Antoni Tajduś
Keyword(s):  
Coal Mining ◽  
Fossil Fuels ◽  
Coal Gasification ◽  
Economic Effect ◽  
Balance Sheet ◽  
Value Added ◽  
Coal Extraction ◽  
Innovative Technology ◽  
Hard Coal ◽  
Underground Coal Gasification

Abstract Learning to control fire changed the life of man considerably. Learning to convert the energy derived from combustion of coal or hydrocarbons into another type of energy, such as steam pressure or electricity, has put him on the path of scientific and technological revolution, stimulating dynamic development. Since the dawn of time, fossil fuels have been serving as the mankind’s natural reservoir of energy in an increasingly great capacity. A completely incomprehensible refusal to use fossil fuels causes some local populations, who do not possess a comprehensive knowledge of the subject, to protest and even generate social conflicts as an expression of their dislike for the extraction of minerals. Our times are marked by the search for more efficient ways of utilizing fossil fuels by introducing non-conventional technologies of exploiting conventional energy sources. During apartheid, South Africa demonstrated that cheap coal can easily satisfy total demand for liquid and gaseous fuels. In consideration of current high prices of hydrocarbon media (oil and gas), gasification or liquefaction of coal seems to be the innovative technology convergent with contemporary expectations of both energy producers as well as environmentalists. Known mainly from literature reports, underground coal gasification technologies can be brought down to two basic methods: - shaftless method - drilling, in which the gasified seam is uncovered using boreholes drilled from the surface, - shaft method, in which the existing infrastructure of underground mines is used to uncover the seams. This paper presents a hybrid shaft-drilling approach to the acquisition of primary energy carriers (methane and syngas) from coal seams located at great depths. A major advantage of this method is the fact that the use of conventional coal mining technology requires the seams located at great depths to be placed on the off-balance sheet, while the hybrid method of underground gasification enables them to become a source of additional energy for the economy. It should be noted, however, that the shaft-drilling method cannot be considered as an alternative to conventional methods of coal extraction, but rather as a complementary and cheaper way of utilizing resources located almost beyond the technical capabilities of conventional extraction methods due to the associated natural hazards and high costs of combating them. This article presents a completely different approach to the issue of underground coal gasification. Repurposing of the already fully depreciated mining infrastructure for the gasification process may result in a large value added of synthesis gas production and very positive economic effect.

scholarly journals Analysis of SERVQUAL Application to Service Quality Measurement and Its Impact on Loyalty in Ghanaian Private Universities

2017 ◽  
Vol 8 (4) ◽  
pp. 18 ◽  
Author(s):  
Stephen Banahene ◽  
Eric Ahudey ◽  
Abigail Asamoah
Keyword(s):  
Service Quality ◽  
Methodological Approach ◽  
Private Universities ◽  
Quality Measurement ◽  
Difference Scores ◽  
Quality Perception ◽  
Graphical View ◽  
Graphical Technique ◽  
The Difference ◽  
Quality Decision

The purpose of this research is to use an adapted SERVQUAL method to measure service quality in Ghanaian Private Universities. The study use graphical technique for data presentation.The methodological approach follows the traditional SERVQUAL method of service quality perception and expectation as well as the difference scores determination. This approach is intended to improve SERVQUAL method analysis to achieve quality decision making based on graphical view of different relationships among the concepts used in the method. The study is on 321 students’ perception and expectations of five different Private Universities in Ghana.The study finds that students’ perception on Private Universities’ performance predict their loyalty better than the expectations. Managerial action can be better taken on service quality variables when the difference scores are used as percentage on perception. However, different service quality measurement methods such as SERVPERF and HEdPERF should be used and compared the results with this modified SERVQUAL method in Ghanaian Private Universities.This research finding has the strength to equip marketing professionals and researchers to increase SERVQUAL method adoption among different academic institutions.The value in this study is found in highlighting the importance of difference scores and the graphical demonstration of relationships among service quality perception and expectation as well as loyalty constructs in Ghanaian Private Universities.

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