Abstract
Business valuation is very important and complex process, mainly in the current global situation. To determine the company value, we will base our calculations on an analysis of the internal environment of the company, which is affected by macroeconomic and microeconomic influences. The aim of this paper is to determine the value of a selected company using FCFF in an environment of negative and unplanned interventions in the economy. The main source for determining the value of the company is data obtained from the financial statements and annual reports of the limited liability company Pepco, s.r.o. from the period of 2013-2018. The method applied to the selected company is the discounted cash flow method, which is one of the most popular and most frequently used earnings methods. In the first years before the company became known on the Czech market, the value of the FCFF was more often than not in negative numbers. This also affected the value of the business. During next years, with the stable growth of the company, the value of the company also grew. We can expect that due to the global problem of COVID-19, the value of the company will decrease in 2020, but it will not have a very significant effect on its overall value.
Highlights
Business valuation, or determining the value of a company, is a complex process in which various experts from various fields may participate
The method applied to the selected company is the discounted cash flow method, which is one of the most popular and most frequently used earnings methods
With the help of data about the company, the amount of free Cash Flow was determined during the company's operation in the Czech Republic, which was crucial for the company's valuation
Summary
Determining the value of a company, is a complex process in which various experts from various fields may participate. If the owner of a company decides for merger, they should be well aware of its value, so that they know whether the merger is advantageous for or not To determine this value, we will base our calculations on an analysis of the internal environment of the company, which is affected by macroeconomic and microeconomic influences [1,2,3,4]. This is a very difficult situation for self-employed individuals and businesses, as their main source of income is still limited. This sudden problem will force businessmen to think and decide in which direction they will lead their company [5,6]
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