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Asset-Based Approach to Valuation
Abstract
This chapter explores the asset-based approach to valuation. It first underscores the advantages and weaknesses of owner’s equity recorded on the balance sheet as an indicator for the value of a company.
... However, as the choice of an accounting system relies on the discretion of the board, bias and controversies in this respect can be quite common [30]. Some findings also argued that if owners and shareholders assessed the real value of the properties by market value, other intangible elements were required for the accurate valuation of the securities [31]. It was reported that these businesses were reporting their investments at a fair market value with strong results on the market [32]. ...
The main objective of this study is to find out why sugar companies’ revaluation of their
fixed assets has no direct financial impact. The purpose of this financial statement analysis of the sugar sector is to help potential investors make better decisions. It can also be used to address information asymmetries and alert investors. Fixed assets form a major part of a company’s value. During 2013–2018, 19 selected enterprises of Pakistan’s sugar sector adopted the International Accounting Standards Board’s international accounting standard 16 for fixed assets. Ordinary least squares, fixed effects, and random effects methods were used as a static panel, a panel-corrected standard errors method was used for the robust standard error and the system generalized method of moments was used as a dynamic panel. The surplus had a negative impact on operative income on revaluation of fixed assets in sugar businesses. As expected, revaluation by fixed asset firms resulted in changes in potential outcomes, as measured by cash in operating income and revenue, both of which were extremely negative. The return on assets was also linked to revaluation balance. The debt over the proportion of assets resulted in a strong correlation between revaluations, which meant that motivation affected how the volatility in asset value reflected the revaluation. Relationships were generally worse and more uncertain for listed companies at a time of strong economic volatility.Investors should not consider such accounting justice. The price-earnings ratio had a beneficial effecton operative income. The statistics support the idea that external concerns help the revaluationof assets.
This study proposes a syirkah model for gold monetization as a product innovation opportunity alternative in Islamic Financial Institutions (IFI) towards bullion bank activity implementation because of Act of Law No. 4 of 2023 about P2SK. A descriptive qualitative approach was used in this study of fiqh literature from Shariah Standard No. 57 on gold trading and its trading control released by the World Gold Council and AAOIFI, as well as Fatwa DSN MUI for Musharakah contract. This study was also validated by semi-structured interviews. To clearly define the originality, we use simulation to present and compare the concept with an existing gold-based pawn contract (Ar-Rahnu). Risk-adjusted calculation to protect the initial value. The result shows that this syirkah model can be an alternative to productive gold investment.
"Offering an interesting contribution by expanding ratios beyond their immediate applicability, this book is a must-read for both students and professionals in the accounting and finance fields, especially those keen to stay up to date with the latest information."
—Razvan Hoinaru, Queen Mary University of London, UK
Explaining the underlying logic behind financial ratios, this book adds to the discussion on the importance and implementation of ratios and illustrates the essential role that they play in company evaluations and investment screening. The author explores how ratios establish a proportional relationship between accounting and market data, and when well-integrated into a global company vision, can become powerful indicators capable of outlining relevant information and identifying warning signs. Going beyond merely listing possible ratios and looking further into their implementation, each ratio family is demonstrated with numerous graphs and practical case studies involving companies such as Amazon, Walmart and Alibaba. With a focus on behavioral finance and enterprise value, this innovative Palgrave Pivot will be of interest to investors, bankers and entrepreneurs, as well as finance scholars and students.
Recent literature in empirical finance is surveyed in its relation to underlying behavioral principles, principles which come primarily from psychology, sociology and anthropology. The behavioral principles discussed are: prospect theory, regret and cognitive dissonance mental compartments, overconfidence, over- and underreaction, representativeness heuristic disjunction effect, gambling behavior and speculation, perceived irrelevance of history thinking, quasi-magical thinking, attention anomalies, the availability heuristic contagion, and global culture.
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