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Assessment Approaches: Market Approach

Author

Listed:
  • Elena Valentina ȚILICĂ

    (Bucharest University of Economic Studies)

  • Radu CIOBANU

    (Bucharest University of Economic Studies)

Abstract

According to the International Assessment Standards, in order to obtain a certain type of value, the three approaches of the unanimously acknowledged and applied value may be used, that are substantiated on the economic principles of substitution, variable proportions or benefits anticipation: the cost, market and income approach. This article presents aspects of the market approach (based on comparison), which is used when the value of a company can be determined by comparisons with the known values of other companies that have been the subject of sale and purchase transactions. The comparative analysis is based on the similarities and differences between the considered companies and the frequency of transactions, which influences the value.

Suggested Citation

  • Elena Valentina ȚILICĂ & Radu CIOBANU, 2023. "Assessment Approaches: Market Approach," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 4(3), pages 46-52, March.
    • Handle: RePEc:ahd:journl:v:4:y:2023:i:3:p:46-52
    DOI: 10.37945/cbr.2023.03.05
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    More about this item

    Keywords

    assessment; market approach; comparison; transactions of minority packages; share price; net profit per share;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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