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The subject of business valuation is a very controversial one. Indeed, many practitioners agree that it is not an exact science. It is therefore understandable that the valuation of Belgian small and medium-sized enterprises is even more so. The lack of visibility of the market makes comparisons almost impossible and involves varied and poorly formalized methodologies. In addition, there are many evaluation techniques and can lead to results that are very different from each other. These differences are mainly due to the parameters used in the implementation of methods.

This project-thesis will therefore be divided into two main parts. The first one will present in a theoretical way the different valuation techniques of the host company. It will provide the necessary information to the reader so that he or she can have the knowledge necessary for a proper understanding of the project. The second part will discuss the analyses carried out on the company's operational tool as well as the research carried out on the market, with professionals in the field. The results obtained will then be presented and will lead to modifications and improvements to the Excel tool, which will also be developed in this part of the work.

This paper will therefore address some of the parameters used when implementing techniques, such as Small Firm Premium or the amount of equity capital used. It will also make it possible to analyze the relevance of the methods implemented and the accuracy of new techniques. Finally, advice and suggestions will be given to the company in order to enable it to better defend its files and obtain valuation results closer to the prices the market accepts to pay.

Enterprise Valuation --- Equity Value --- Corporate Finance --- Small Firm Premium --- Discounted Cash Flows --- Small and Medium Enterprises --- Sciences économiques & de gestion > Finance

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Liquidity and solvency have been called the "heavenly twins" of banking (Goodhart, Charles, 'Liquidity Risk Management', Financial Stability Review - Special Issue on Liquidity, Banque de France, No. 11, February, 2008). Since these "twins" interact in complex ways, it is difficult - particularly at times of crisis - to distinguish between them, especially in the presence of information asymmetries (Information asymmetry occurs when one party has more or better information than the other, creating an imbalance of power, giving rise to adverse selection and moral hazard ). An insolvent bank can be liquid or illiquid, and a solvent bank may be at times illiquid. In the latter case, insolvency is not far away, since banking is grounded in information and confidence, and it is confidence which in the end determines liquidity. In other words, liquidity is very much endogenous, determined by the general condition of a bank, as well as the perception of it by the public and market participants. Dealing with liquidity risk is more challenging than dealing with other risks, since liquidity is the result of all the operations of a bank and it is fundamentally a relative concept which compares segments of the balance sheet on the asset and liability sides. It does not deal with absolutes, like arguably the concept of capital and it explains why there is not an internationally recognized "Liquidity Accord". This Working Paper addresses key concepts like market and funding liquidity and basic tools to address liquidity issues like cash flows, liquidity gaps and some selected financial ratios. It aims at providing an introductory guide to risk assessment and management, and provides useful and practical guidelines to undertake liquidity assessments which could prove useful in preparing Financial Assessment Programs (FSAPS) in member countries of the Bretton Woods institutions.

Balance sheet --- Banking system --- Bankruptcy and Resolution of Financial Distress --- Banks and Banking Reform --- Cash flows --- Central bank --- Currencies and Exchange Rates --- Debt Markets --- Deposits --- Emerging Markets --- Finance and Financial Sector Development --- Financial Stability --- Information asymmetries --- Information asymmetry --- International Bank --- Lender --- Liability --- Liability sides --- Liquidity --- Liquidity Risk --- Market participants --- Maturity --- Moral hazard --- Private Sector Development --- Risk Management --- Solvency --- Withdrawal

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Liquidity and solvency have been called the "heavenly twins" of banking (Goodhart, Charles, 'Liquidity Risk Management', Financial Stability Review - Special Issue on Liquidity, Banque de France, No. 11, February, 2008). Since these "twins" interact in complex ways, it is difficult - particularly at times of crisis - to distinguish between them, especially in the presence of information asymmetries (Information asymmetry occurs when one party has more or better information than the other, creating an imbalance of power, giving rise to adverse selection and moral hazard ). An insolvent bank can be liquid or illiquid, and a solvent bank may be at times illiquid. In the latter case, insolvency is not far away, since banking is grounded in information and confidence, and it is confidence which in the end determines liquidity. In other words, liquidity is very much endogenous, determined by the general condition of a bank, as well as the perception of it by the public and market participants. Dealing with liquidity risk is more challenging than dealing with other risks, since liquidity is the result of all the operations of a bank and it is fundamentally a relative concept which compares segments of the balance sheet on the asset and liability sides. It does not deal with absolutes, like arguably the concept of capital and it explains why there is not an internationally recognized "Liquidity Accord". This Working Paper addresses key concepts like market and funding liquidity and basic tools to address liquidity issues like cash flows, liquidity gaps and some selected financial ratios. It aims at providing an introductory guide to risk assessment and management, and provides useful and practical guidelines to undertake liquidity assessments which could prove useful in preparing Financial Assessment Programs (FSAPS) in member countries of the Bretton Woods institutions.

Balance sheet --- Banking system --- Bankruptcy and Resolution of Financial Distress --- Banks and Banking Reform --- Cash flows --- Central bank --- Currencies and Exchange Rates --- Debt Markets --- Deposits --- Emerging Markets --- Finance and Financial Sector Development --- Financial Stability --- Information asymmetries --- Information asymmetry --- International Bank --- Lender --- Liability --- Liability sides --- Liquidity --- Liquidity Risk --- Market participants --- Maturity --- Moral hazard --- Private Sector Development --- Risk Management --- Solvency --- Withdrawal

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November 1999 - Financial reorganization under bankruptcy reduces a firm's debts to serviceable levels through negotiations overseen by courts. Academics have suggested using markets for such negotiations, giving equity holders and junior claimants call options to buy the firm back from senior creditors. Hausch and Ramachandran further develop such a market-based approach for situations in which claimants are severely cash-constrained and there is good reason for existing owner-managers to remain in control. Under the ACCORD scheme - Auction-based Creditor Ordering by Reducing Debts - creditors remain creditors but form a queue, to be serviced in sequence from the firm's operating cash flows. Creditors bid for their position in this queue. Those accepting greater proportionate reductions in the face value of their claims (perhaps most pessimistic about the firm's prospects) are placed ahead of the others. A preexisting hierarchy of claims is honored by having claimants bid for their positions within the relevant segment of the queue. No one in the queue, including owners (who are last), is paid anything until the (reduced) debts of the first in line are fully discharged. The queue then moves up and the next claimant in line is serviced. Deferred creditors, who must wait their turn for the firm's operating cash surpluses, are not junior creditors in the conventional sense. Hausch and Ramachandran determine equilibrium bidding strategies, showing that the firm's aggregate debts would be reduced to a more serviceable level. This would improve the incentives of the firm's owner-managers, who remain in control, to operate the firm efficiently. Economic resources would thus be better used, and losses already incurred would be efficiently and quickly allocated among creditors. Hausch and Ramachandran suggest that ACCORD would be appropriate for East Asia, where, despite new bankruptcy laws, inexperienced courts are unlikely to nudge creditors into a quick negotiated agreement nor to be able to cope with systemic bankruptcy. Moreover, when the government is a major unsatisfied creditor, whose agents may not act in the taxpayers' best interests, market-based solutions might remove political interference from restructuring decisions. Neither owners nor creditors would be worse off than they are now. This paper - a joint product of the Private Sector Development Department, and Poverty Reduction and Economic Management Sector Unit, East Asia and Pacific Region - is part of a larger effort in the region to understand and improve corporate restructuring and governance. The authors may be contacted at dhausch@bus.wisc.edu or sramachandran@worldbank.org.

Aggregate Debts --- Auction --- Bankruptcy --- Bankruptcy Laws --- Bid --- Call Options --- Cash Flows --- Claimant --- Claimants --- Creditor --- Creditors --- Debt Markets --- Debts --- Deposits --- Domestic Banks --- Equity --- Face Value --- Finance and Financial Sector Development --- Financial Literacy --- Interests --- Investment and Investment Climate --- Junior Creditors --- Macroeconomics and Economic Growth --- Market --- Markets --- Strategic Debt Management

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Fiscal adjustment becomes like walking up the down escalator when growth-promoting spending is cut so much as to lower growth and thus the present value of future tax revenues to a degree that more than offsets the improvement in the cash deficit. Although short-term cash flows matter, a preponderant focus on them encourages governments to invest too little. Cash flow targets also encourage governments to shift investment spending off budget, by seeking private investment in public projects-irrespective of its real fiscal or economic benefits. To evade the action of cash flow targets, some have suggested excluding from their scope certain investments (such as those undertaken by public enterprises deemed commercial or financed by multilaterals). These stopgap remedies might sometimes help protect investment, but they do not provide a satisfactory solution to the underlying problem. Governments can more effectively reduce the biases created by the focus on short-term cash flows by developing indicators of the long-term fiscal effects of their decisions, including accounting and economic measures of net worth, and where appropriate including such measures in fiscal targets or even fiscal rules, replacing the exclusive focus on liquidity and debt.

Accounting --- Bank Policy --- Banks and Banking Reform --- Budget --- Cash Flow --- Cash Flows --- Debt --- Debt Markets --- Defic Exchange --- Economic Stabilization --- Economic Theory and Research --- Emerging Markets --- Finance and Financial Sector Development --- Financial Literacy --- Fiscal Discipline --- Future --- Investment and Investment Climate --- Investment Spending --- Investments --- Liquidity --- Macroeconomics and Economic Growth --- Non Bank Financial Institutions --- Private Financing --- Private Investment --- Private Sector Development --- Public Investment --- Public Investments --- Public Sector Economics and Finance --- Public Sector Expenditure Analysis and Management --- Public Spending --- Revenues --- Tax