METHODS FOR VALUATION OF RESTRUCTURING IMPACT ON FINANCIAL RESULTS OF A COMPANY

Abstract

In this paper, methods of valuation of restructuring impact on company’s financial results are analysed. Such analysis is important as attention to restructuring is growing; however scientific literature does not present a single methodology for estimation of restructuring impact on value of a company and its performance results. There are analysed following valuation methods: traditional indicators of performance measurement (financial ratios), cash flow methods, value based methods, and cash flow return on investment. It was found that most of methods refer to profit (use accounting data) or cash flow (are based on forecasts, therefore often difficult to calculate and unreliable). The most of advantages have traditional performance evaluation methods (financial ratios) and one of value based methods (EVA); therefore they are the most suitable to estimate impact of restructuring on value of a company and its performance results.

DOI: http://dx.doi.org/10.5755/j01.em.17.4.2990