FOR THE COST-BASED APPROACH OF THE BUSINESS VALUATION

Abstract

The paper discusses the methodological issue of the operational business valuation in the conditions of the modern market economy.

It is under the daily interest of any business owner or partner to be aware of the condition of business management, the strengths and weaknesses of the business activities.

The important indicator for the successful activity of business is its value. The value of the business is the basis for the income of the owners and defines the market capitalization of the business.

The paper describes the modern selection criteria for the business valuation. In particular, the condition of the costs and its methods are focused, the advantages and disadvantages of the applied approache and its methods are explained.

The paper lists the conditions, which defines the necessity of use of the cost-based approach of the business valuation and the necessity for appliance of its methods.