Digest Finance
 

Analytical Capabilities of Modern Information Systems as Part of the Income-Based Business Valuation Method

Vol. 23, Iss. 1, MARCH 2018

PDF  Article PDF Version

Received: 30 October 2017

Received in revised form: 1 December 2017

Accepted: 4 December 2017

Available online: 30 March 2018

Subject Heading: FINANCE OF ORGANIZATIONS. ANALYSIS OF ACCOUNTING SYSTEMS

JEL Classification: G32

Pages: 41–54

https://doi.org/10.24891/df.23.1.41

Bogatyrev S.Yu. Financial University under Government of Russian Federation, Moscow, Russian Federation
sbogatyrev@fa.ru

ORCID id: not available

Importance The research focuses on new software and information tools for valuation. The research deals with aspects of business valuation based on the income-based valuation method.
Objectives I scrutinize aspects of adjusting the valuation framework to new analytical capabilities and demonstrate distinctive scope of information and analytical data on ratios and metrics stored in such systems and available for financial analysts.
Methods The research is based on the DCF method from perspectives of income-based business valuation.
Results I analyze capabilities of software and technological tools of modern information systems and measure the value of different items using the DCF method through various models. The article displays positive aspects of analytical tools of the information systems and identifies what restrictions and limits they impose on a financial analyst. The article unveils the limited nature of data resources in foreign information systems and indicates the Russian alternative information resources for improving the use of the DCF-based models.
Conclusions and Relevance Financial analysts may benefit from new capabilities of model information systems. They streamline primary data collection and processing for business valuation purposes and standardization of financial reporting. The article outlines the future of new information resources and their use in business valuation. The findings may prove useful in financial analysis and financial reporting.

Keywords: income-based method, discounting, cash flow, discount rate, information system

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