• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Business valuation article example

Forums › ACCA Forums › ACCA AFM Advanced Financial Management Forums › Business valuation article example

  • This topic has 4 replies, 4 voices, and was last updated 9 years ago by tarimo.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • May 6, 2014 at 4:58 pm #167672
    karmuks
    Member
    • Topics: 29
    • Replies: 109
    • ☆☆

    Can somebody please help me with discount factor rate used in year 2018. Rate is 7.067, where is it coming from?

    link to article:

    https://www.accaglobal.com/ie/en/student/acca-qual-student-journey/qual-resource/acca-qualification/p4/technical-articles/business-valuations.html

    May 10, 2014 at 10:55 am #168165
    sameed
    Member
    • Topics: 40
    • Replies: 97
    • ☆☆

    314*(1.03)/12%-3% and discount it at 12% rate factor for 5 years I.e 0.567 and then you add the 2018 value of 314 after discounting it at the same rate I.e 0.567, you get this figure.

    It is a very weird way indeed. I don’t know if I’ll be able to do it in the exam.

    May 10, 2014 at 1:32 pm #168215
    karmuks
    Member
    • Topics: 29
    • Replies: 109
    • ☆☆

    I figured out 1/0.12-0.03 x 0.636 (4 year rate) = 7.067. Actually formula was given in note 9. Perpetuity starts in year 5, so we discount it for a 4 years.

    314/0.09 x 0.636 =2219

    October 21, 2015 at 10:14 am #278044
    petrochina
    Member
    • Topics: 6
    • Replies: 79
    • ☆☆

    Can anyone explain why there are no working capital adjustments? Normally for FCFF we adjust EBIT (1-T) for working capital items, non cash expences and CAPEX, but there are no WC adjustments in the article… Easy to get confused due to inconsistent approach…

    Sales and operating profit itself is accounted based on accrual basis so it is not a cash flow, so we need to adjust it using WC adjustments in order to make it a cash flow is not it?

    November 2, 2015 at 4:54 pm #280112
    tarimo
    Member
    • Topics: 1
    • Replies: 3
    • ☆

    How i’ve understood, WC adjustments are there right after Operating profit row i.e. taxation and depreciation. But yes, the presentation does not clearly separate the them. i think its not a must.

  • Author
    Posts
Viewing 5 posts - 1 through 5 (of 5 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • effy.sithole@gmail.com on EPS – diluted EPS Example – ACCA Financial Reporting (FR)
  • Ken Garrett on The Finance Function in the Digital Age – CIMA E1
  • DeborahProspect on ACCA SBR Specimen Exam 2 Question 1
  • darshan.69 on Chapter 9 Pension Schemes TX-UK FA2023
  • darshan.69 on Chapter 9 Pension Schemes TX-UK FA2023

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in