Case study of family business: a comparative of valuation methods

The determination of the market value of a company is not trivial, after all, requires the analyst consistency and conceptual accuracy, as there are available in the literature several methods that are designed to allow this action. Among the possible methods can be related those purely practical and objective, such as equity, and the load of subjectivity and complexity, such as the economic value added, or the discounted cash flow. Given the above, this article presents, through the descriptive method of case study, the valuation of an industrial family managed company, by using various methods described in the academic literature, and analyzes the changes in the value of it over time, as with respect to differences resulting from the method used. An analysis was made on the accounting reports of the company, and was founded that the discounted cash flow method and the economic value added method found close values to the year 2009, and it was found also that the company's value for methods based on the future capability of the entity (EVA and FDC) were higher than the value measured by the equity methods, which indicates the superiority of these methods to evaluate the entity for its economic potential, and not the financial resources invested.