Hello, chuckyegg-ga!
You have asked, "What is the difference between financial reports and
valuation exercises?"
I will proceed to give you explanations and examples of both.
What is a financial report?
****************************
A financial report is commonly called a "Financial Statement." It
includes historical data about a company and it's financial health.
Financial statement:
"A written report which quantitatively describes the financial health
of a company. This includes an income statement and a balance sheet,
and often also includes a cash flow statement. Financial statements
are usually compiled on a quarterly and annual basis."
From "Investorwords.com
http://www.investorwords.com/cgi-bin/getword.cgi?1957&financial%20report
From the link above, you can access various other definitions commonly
associated with the financial report
Example of a company Financial Report
*************************************
To see the 2001 Financial Report of "Pharmacia," refer to the lengthy
PDF document at
http://media.corporate-ir.net/media_files/NYS/PHA/reports/ar2001.pdf
On the third page, you will start to see the beginning of the
financial overview.
To see more reports, some of shorter length, go to Pharmacia's
Investor Relations page at
http://164.109.61.198/investor/financialrep.asp
==============================================
What is Valuation?
******************
Valuation:
"The process of determining the value of an asset or company. There
are many techniques for valuation, and it is often partially objective
and partially subjective."
From "Investorwords.com"
http://www.investorwords.com/cgi-bin/getword.cgi?5207
From the link above, you can access various other definitions commonly
associated the the term valuation.
There are many types of valuation depending on the type of company.
For instance, there is valuation of inventory that a company may hold,
appraisal valuation of property, etc.
Some examples of valuation:
General Valuation
Industry-Specific Valuation
Professional Practice Valuation
Estate & Gift Tax Valuation
Limited Partnership Valuation
Divorce Valuation
ESOP Valuation
Mergers & Acquisitions
Intangible Assets Valuation
SFAS 141 & 142 Valuation
Technology Valuation
Real Property Valuation
From "Valuation Resources." Valuation Resources.com
http://www.valuationresources.com/
******
However, I am assuming you are talking about financial valuation of a
company's stocks to it's shareholders. If I am wrong, please correct
me in a clarification!!
******
What is a valuation exercise?
*******************************
For an online example of a stock valuation exercise, go to "
"Stock Valuation Exercises," by Pamela P. Peterson. Florida State
Universiy
http://garnet.acns.fsu.edu/~ppeters/fin3403/work/stock/index.htm
The online tutorial has four sample problems and takes you through
the steps to figure out the stock valuation.
================
The Capital.com website has a sample company valuation exercise with
posted results that may interest you.
Go to http://aov.capital.com/
Click on "click here to view a sample set of valuation results."
You should arrive at this page:
http://aov.capital.com/Valuation/online/sample.htm
(It is surely enough to make anyone's head spin!!!)
======
Online Tutorial On Investments, including Valuation and Analysis of
Financial Statements
********************************************************************************
Visit the Pearson/Prentice Hall Companion Website
http://myphlip.pearsoncmg.com/cw/mplistres4.cfm?vbookid=277
This should give you some vary good understanding of the concepts of
Financial Reporting and Valuation exercises.
To learn more about valuation, there are plenty of books that offer
valuation exercises:
********************************************************************************
"Valuation WorkBook: Step-by-Step Exercises and Test to Help You
Master Valuation," by McKinsey & Co Inc., Tom Copeland, Tim Koller,
Jack Murrin, William Foote. (9/29/2000)
http://hallbusinesses.com/index.php/Mode/product/AsinSearch/0471397512/name/Valuation%2520WorkBook%253A%2520Step-by-Step%2520Exercises%2520and%2520Test%2520to%2520Help%2520You%2520Master%2520Valuation/browse/2604/page/1
=====
Please let me know if I can help you further. Since your question was
very basic, I have provided the information that pertains strictly to
the question as asked.
If you need further help, don't hesitate to ask for clarification and
I will try my best to provide further assistance.
umiat-ga
Google Search Strategy
valuation exercises
valuation
+definition valuation
+definition financial statement |
Clarification of Answer by
umiat-ga
on
27 Feb 2003 18:14 PST
Hi again, chuckyegg!
This is all confusing, I know. Basically, in very simple terms:
A financial report provides a historical picture of a company over a
period of time, measuring things like cash flow into the company, cash
flow out of the company, value of assets based on their original cost
adjusted for depreciation, etc. It is merely a picture of how a
company is doing financially during a given period of time. Therefore,
you will often see annual financial reports, quarterly reports, etc.
Obviously, the best financial picture of a company will show that the
cash flow in is greater than the cash flow out. Think of it like your
checkbook! The financial picture changes depending on your income,
your debts, and how well you can maintain a balance. You obviously
hope to keep your head above water.
Valuation is based on the estimated value of a company....what the
company would bring on the market if it were to be sold. It is an
estimate of what the company is worth in financial terms. All the
different assets are taken into consideration, comparisons to other
companies on the market and what they have sold for, etc. It is not a
historical picture of the company, like the financial statement is.
However, consideration of past and current financial statements would
certainly be included in the valuation.
Whereas a financial statement is quite straightfoward (just look up
any company on the web, by typing the company name and "financial
statement" into the search engine) and you will see that they all have
the same basic elements.
Valuation, on the other hand, can be determined by many different
methods. Take a look at the following reference:
"Business Valuation." Mefeld and Schine, Inc.
http://www.mergers-acquisitions.com/valu.html
As you can see, there are at least 8 methods of valuation listed on
their site.
All these valuation methods include particulars that are not
necessarily included in a financial statement.
However, you probably don't need to get muddled up by all of this.
You seem to merely want to know the basic difference between a
financial statement and valuation. Both have very different purposes.
The financial statement is a picture of the company without really
determining a market value, whereas valuation is geared toward that
end.
Look at the example of the financial statement I provided in the
answer, and then the example of the valuation statement and all the
components included, and it should give you a good idea of the
contrast.
Don't make the concepts harder than they really are. Look at it
simply.
umiat
|
,
0 Comments
)