The quality determining the general value of businesses through discounted cash flow method
The quality determining the general value of businesses through discounted cash flow method

Summary/Abstract: TT he contribution aims to estimate the quality of determining the general valueof the selected company and to determine the most suitable model through the methodof discounted cash flows. The general value of the enterprise is an expert’s estimateof the most probable price of the assessed property on the day of the assessment atthe given place and time. The quality of determining the general value of the enterpriseis essentially related to the assessment of the actual situation in the enterprise, whichincludes obtaining and using funds, fluidity of financial flows, investing in otheractivities, the ability to repay foreign resources, planning and the current state ofthe enterprise. In the contribution, we focused on the quality of determining thegeneral value of the company with an emphasis on the revenue potential. We carriedout the valuation of the assets of the selected company in a two-phase process, whichconsisted of the calculation of free cash flows, the average weighted cost of capital, andthe calculation of the company’s value based on the parametric and Gordon formulas.When determining the general value of a company, it is also essential to considerwhether the financial results of the company depend on economic deviations, and itis necessary to monitor the capital market, the development of interest rates on loansprovided by banks, and the development of interest rates on government bonds.

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