Værdiansættelse af virksomheder med cirkulære 2000-10 fra SKAT: En empirisk undersøgelse

Erik Vindahl Andersen & Søren Juhl Poulsen

Student thesis: Master thesis


We have chosen to study the Danish tax authority’s guidelines on the valuation of goodwill. The thesis tests the guidelines’ ability to estimate market prices. The guidelines are designed to value unlisted companies. The guidelines are tested on companies grouped by accounting class. The study shows that the guidelines are better at valuing companies in accounting class C-middle sized rather than C-major. Fama and French (1992) have shown that large firms are relatively more expensive than smaller businesses. When the estimates from the tax authority’s guidelines are compared to the market values, it is found that larger companies are undervalued. It is not possible to reject the hypothesis that the guidelines estimate prices at the level of the stock market for companies in accounting class C-middle sized. For companies in accounting class C-major and all companies together, the hypothesis is rejected regardless of test level, however. Besides the study of the guidelines, we have developed our own model. This model is also tested significantly different from the stock market, when tested at a 95 percent-level. The model is better to value businesses overall, but falls short when trying valuate companies in the accounting class C middle sized. One of the drawbacks of using our model is especially that the WACC calculations are inappropriate for unlisted companies. In the thesis the tax authority’s guidelines and our model is compared with the Discounted Cash Flowmodel. The DCF-model requires a higher level of resources than both the guidelines and our model. On the other hand, it is expected that the DCF-model will be able to contribute with an insight into the value-creating processes, and thus better estimates of the market value of companies. In view of our analysis it is difficult to recommend the tax authority’s guidelines as a good and useful valuation tool, however, it is surprising that the guidelines still manages to price particularly middle-sized enterprises fairly reasonable. When valuing smaller businesses, we think it is recommendable from a cost-benefit consideration to use the guidelines, possibly in a slightly reworded form. The argument is that the cost of valuing companies with the DCF-model exceeds the extra insight obtained by using the model. In this thesis we have gained insight into how complicated it is to valuate companies using simple methods. There are rarely two companies that are identical, and the complexity is not reduced by the fact that the value of an underlying asset can vary from one buyer to another. Our analysis has shown that especially size and industry seem to influence the value of companies. Lack of insight into the buyer's motives also ensures that the science of valuing companies remains imprecise.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2009
Number of pages154