Prediction of economic growth to determine the growth rate of business value

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216305%3A26510%2F19%3APU132653" target="_blank" >RIV/00216305:26510/19:PU132653 - isvavai.cz</a>

Výsledek na webu

<a href="https://is.muni.cz/do/econ/sborniky/2019/" target="_blank" >https://is.muni.cz/do/econ/sborniky/2019/</a>

DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

Prediction of economic growth to determine the growth rate of business value

Popis výsledku v původním jazyce

The aim of this paper is to describe approaches to determining the growth rate of two-stage discounted cash flow valuation method and to propose possibilities to refine its prediction. Business value is given by a set of business-economic variables, so-called value drivers; one of which is the growth rate. The determination of the growth rate is based on an analysis and prediction of macroeconomic factors and on the company’s internal factors. According to our research the value of an enterprise is very sensitive to changes in the growth rate. Therefore, we believe the issue requires closer attention. The growth rate as a value driver is commonly derived from the GDP growth rate, which characterizes economic cycles. In literature this is often identified with business cycles. Authors of this paper deal with GDP prediction and possibilities of using composite indicators to determine the growth rate of cash flow, specifically to refine the first phase prediction. Composite indicators are used to predict the development of economic cycles and their use is therefore particularly suitable for pro-cyclical sectors. Another possibility of using composite indicators is to incorporate partial factors directly into business valuation models. In particular, we see the benefit of using composite indicators in their better accessibility. For the purpose of our analysis we use the Pearson correlation coefficient to determine the correlation between the GDP and the selected industry from 2007 to 2017 or the composite indicator, the logarithmic difference to analyse economic cycles and the mean deviation value to compare the GDP prediction with the real GDP.

Název v anglickém jazyce

Prediction of economic growth to determine the growth rate of business value

Popis výsledku anglicky

The aim of this paper is to describe approaches to determining the growth rate of two-stage discounted cash flow valuation method and to propose possibilities to refine its prediction. Business value is given by a set of business-economic variables, so-called value drivers; one of which is the growth rate. The determination of the growth rate is based on an analysis and prediction of macroeconomic factors and on the company’s internal factors. According to our research the value of an enterprise is very sensitive to changes in the growth rate. Therefore, we believe the issue requires closer attention. The growth rate as a value driver is commonly derived from the GDP growth rate, which characterizes economic cycles. In literature this is often identified with business cycles. Authors of this paper deal with GDP prediction and possibilities of using composite indicators to determine the growth rate of cash flow, specifically to refine the first phase prediction. Composite indicators are used to predict the development of economic cycles and their use is therefore particularly suitable for pro-cyclical sectors. Another possibility of using composite indicators is to incorporate partial factors directly into business valuation models. In particular, we see the benefit of using composite indicators in their better accessibility. For the purpose of our analysis we use the Pearson correlation coefficient to determine the correlation between the GDP and the selected industry from 2007 to 2017 or the composite indicator, the logarithmic difference to analyse economic cycles and the mean deviation value to compare the GDP prediction with the real GDP.

Druh

D - Stať ve sborníku

CEP obor

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OECD FORD obor

50206 - Finance

Projekt

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Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2019

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název statě ve sborníku

European Financial Systems 2019, Proceedings of the 16th International Scientific Conference

ISBN

978-80-210-9338-6

ISSN

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e-ISSN

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Počet stran výsledku

8

Strana od-do

560-567

Název nakladatele

Neuveden

Místo vydání

Brno

Místo konání akce

Brno

Datum konání akce

24. 6. 2019

Typ akce podle státní příslušnosti

WRD - Celosvětová akce

Kód UT WoS článku

000503222600067