Asset valuation equipments

This chapter explained some of the finer details of financial statements. It started with an ei lanation of asset valuation. Assets included property, plant, and equipment (PP E) because they are the most... 

Contemporary observers were stunned by the high annual dividends the leading dyestuffs firms paid from the 1890s to World War I between 18 and 26%. ° But hidden assets, for times of economic crisis like that after 1873, loans to pay back, a quick amortization of plants and equipment, and piling up of reserves, increased real fixed capital, so that paid dividends did not reflect the real value of these firms. Probably dividends should be halved to reach a serious level of valuation. More significantly, these dividends were paid by oligopolistic firms that had divided the German mar-... 

From a supply chain and operations perspective, cost is the most common valuation method. This is largely due to the asset categories associated with supply chain and operations. For example, inventory is typically valued at acquisition cost or replacement cost property, plant, and equipment (PP E) are also valued at acquisition cost. Other asset categories often use a different valuation method. Fair market value is often used when assets are actively traded, such as investments in stocks, marketable securities, and accounts receivables. 

To further complicate matters, adding debt and other obligations back into the equation can modify book and market values. Items such as short- and long-term debts, capital lease obligations, and nonoperating liabilities matter when finding the true value of a company. Further, the valuation of a company varies based on whether or not a company continues over a period of time or is set to liquidate. Companies that continue to operate typically are valued higher than those set to liquidate because their assets will continue to produce revenues for extended periods of time. Conversely, liquidation values are seldom more than book value. They typically substantially less due to the level of obsolescence, coupled with the relatively specialized nature of such surplus equipment. 

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