The most appropriate business Valuation Methods that Optimize and Rationalize Decision Making Process in Business Corporation

Abstract

The slowdown of the economy for many years had affected many businesses due to lack of financial resources or financing impacted by higher foreign exchange rates. There are many objectives of this study, determining the sale or purchase of a business as owners of business can use these methods as common languages for the purpose of valuation. Objectives also include using these methods to determine the value of goodwill of a business. There are four hypothesis of this study that include: - Testing the traditional business valuation methods, - Discounted Cash flow method can provide reliable information, - Pricing multiples including earning per share (EPS) provide reliable information for investment decisions, - Databases from stock markets and other private sources. The findings of the study include:- Discounted cash flow method has significant highlight used by companies as it include the time value of money, - Earnings per share has a positive effect on investors decisions , - Appraising of individual asset will provide basic information which will not assist investors to take decisions, Study recommendations include: - Net income is key financial indicator to measure and improve earnings per share, companies should focus to foster their bottom lines in order to improve their business values. - All publicly held companies must be floated in the stock market to enable establishing database forum for all public companies