This document discusses several topics related to issues that may arise when applying the income approach for property tax valuation purposes. It begins with an example company, ABC Construction Machinery Manufacturing, and uses it to illustrate how intangible assets contribute to income and value. It then discusses methods for extracting the value of intangible assets. The document also addresses estimating a supportable long-term growth rate and assessing the reasonableness of certain income approach assumptions.
The document discusses methods for quantifying economic obsolescence (EO) in the cost approach to valuation. It describes three generally accepted methods: 1) the inutility analysis method, 2) the direct comparison method, and 3) the capitalization of income loss method. It also discusses variations of the capitalization of income loss method that have been applied in practice and critiqued by courts, including an Appraisal Institute variation, a single-period return variation, and a time-series returns variation. The document provides examples and analysis of applying these methods to quantify EO in different valuation scenarios.
The document provides an introduction to the classical approach to management. It discusses that the classical approach views employees as having only economic and physical needs. It was the oldest formal school of management originating in the early 1900s. The classical approach includes scientific management, administrative management, and bureaucratic management. Major contributors included Taylor, Fayol, and Weber. Taylor's scientific management focused on finding the most efficient way to perform jobs. Fayol analyzed management as a universal process and introduced 14 principles of management. Weber introduced concepts of bureaucratic organizations based on rational authority. The document also discusses management as both an art and a science.
This document summarizes a research project on the purchasing procedures and payable management of Grupo Antolin Chakan Private Limited. The research methodology includes studying the company's existing purchasing process, payment terms with vendors, and financial implications of the payable period. The goal is to evaluate current vendors, suggest the ideal vendor to reduce lead times and maximize credit terms, and optimize working capital through extending payable periods. Key findings include that vendor selection is through competitive bidding, payment scheduling considers days offered and supply volumes, and prompt payments are based on discounts provided.
Tiffany Pavlik has over 5 years of experience in purchasing and supply chain management in the manufacturing and steel industries. She has a Bachelor's degree in Business Administration with a specialization in Purchasing and Supply Chain Management. Her experience includes negotiating contracts, sourcing materials internationally, implementing process improvements, and managing inventory. Currently she is seeking a new opportunity in purchasing or supply chain management.
This document discusses organizational buying and business-to-business marketing. It defines business markets as organizations that acquire goods and services for use in production. It notes that business buyers face different buying situations like straight rebuys, modified rebuys, and new tasks. The buying process involves multiple people in a buying center including initiators, users, influencers, deciders, and approvers. Business buyers consider economic, technical, service, and social factors when evaluating suppliers. The stages of the buying process are problem recognition, need description, supplier search, proposal solicitation, supplier selection, order specification, and performance review. Developing effective business marketing involves communication, systems buying, services, and managing buyer-supplier relationships. Institutional
The document discusses methods for quantifying economic obsolescence (EO) in the cost approach to valuation. It describes three generally accepted methods: 1) the inutility analysis method, 2) the direct comparison method, and 3) the capitalization of income loss method. It also discusses variations of the capitalization of income loss method that have been applied in practice and critiqued by courts, including an Appraisal Institute variation, a single-period return variation, and a time-series returns variation. The document provides examples and analysis of applying these methods to quantify EO in different valuation scenarios.
The document provides an introduction to the classical approach to management. It discusses that the classical approach views employees as having only economic and physical needs. It was the oldest formal school of management originating in the early 1900s. The classical approach includes scientific management, administrative management, and bureaucratic management. Major contributors included Taylor, Fayol, and Weber. Taylor's scientific management focused on finding the most efficient way to perform jobs. Fayol analyzed management as a universal process and introduced 14 principles of management. Weber introduced concepts of bureaucratic organizations based on rational authority. The document also discusses management as both an art and a science.
This document summarizes a research project on the purchasing procedures and payable management of Grupo Antolin Chakan Private Limited. The research methodology includes studying the company's existing purchasing process, payment terms with vendors, and financial implications of the payable period. The goal is to evaluate current vendors, suggest the ideal vendor to reduce lead times and maximize credit terms, and optimize working capital through extending payable periods. Key findings include that vendor selection is through competitive bidding, payment scheduling considers days offered and supply volumes, and prompt payments are based on discounts provided.
Tiffany Pavlik has over 5 years of experience in purchasing and supply chain management in the manufacturing and steel industries. She has a Bachelor's degree in Business Administration with a specialization in Purchasing and Supply Chain Management. Her experience includes negotiating contracts, sourcing materials internationally, implementing process improvements, and managing inventory. Currently she is seeking a new opportunity in purchasing or supply chain management.
This document discusses organizational buying and business-to-business marketing. It defines business markets as organizations that acquire goods and services for use in production. It notes that business buyers face different buying situations like straight rebuys, modified rebuys, and new tasks. The buying process involves multiple people in a buying center including initiators, users, influencers, deciders, and approvers. Business buyers consider economic, technical, service, and social factors when evaluating suppliers. The stages of the buying process are problem recognition, need description, supplier search, proposal solicitation, supplier selection, order specification, and performance review. Developing effective business marketing involves communication, systems buying, services, and managing buyer-supplier relationships. Institutional
This document discusses organizational buying and business-to-business marketing. It defines business markets as organizations that acquire goods and services for use in producing other products. It describes characteristics of business buyers and the buying center participants. It outlines the stages in the business purchasing process from problem recognition to performance review. Finally, it discusses developing effective marketing programs, managing business relationships, and selling to institutional and government markets.
Federal Delivery outlines a multistep sourcing and purchasing strategy to create value. The process begins with stakeholder input to develop a sourcing strategy and create a supplier portfolio. Next, potential suppliers are evaluated and selection criteria are established. The implementation process is then decided through competitive bidding, negotiation, or both. Finally, contracts are negotiated and implemented, performance is tracked, and savings are evaluated to improve the process. The goal is to organize a cross-functional global sourcing team and follow through on the strategic plan at each step.
Business Valuations, Business Plans and Business Projections Explained!Kunal Kamath Sarpal
Learn the nuances of business plans, business projections and business valuations. Make the most of the start-up boom and ensure you are on the right track. For all those who own, run or help to run a business.
This document covers the topics of appraisals, valuation principles, and the appraisal process. It discusses what an appraisal is, different types of value, factors that influence value, and principles of valuation. The appraisal process involves defining the problem, gathering and analyzing data on sales comparisons and property details, and using the cost, sales comparison, and income approaches to determine property value. It also discusses appraiser regulations, licenses, and professional organizations.
The document discusses the concept of "Running Lean", which is a systematic process for iterating a startup's web application from the initial "Plan A" to a plan that works. It involves using techniques from Customer Development, Lean Startup, and Bootstrapping. The key aspects are validating problems and solutions with customers, achieving product/market fit through iterative releases, and optimizing for scale once fit is achieved. Progress is measured through validated learning loops involving hypotheses, experiments, qualitative/quantitative validation, dashboards, and communication of learnings. The overall goal is to iterate quickly from the initial plan to one that works through a continuous process of customer feedback and validation.
This document discusses organizational buying and business-to-business marketing. It defines business markets as organizations that acquire goods and services for use in producing other products. It describes characteristics of business buyers and the buying center participants. It outlines the stages in the business purchasing process from problem recognition to performance review. Finally, it discusses developing effective marketing programs, managing business relationships, and selling to institutional and government markets.
Federal Delivery outlines a multistep sourcing and purchasing strategy to create value. The process begins with stakeholder input to develop a sourcing strategy and create a supplier portfolio. Next, potential suppliers are evaluated and selection criteria are established. The implementation process is then decided through competitive bidding, negotiation, or both. Finally, contracts are negotiated and implemented, performance is tracked, and savings are evaluated to improve the process. The goal is to organize a cross-functional global sourcing team and follow through on the strategic plan at each step.
Business Valuations, Business Plans and Business Projections Explained!Kunal Kamath Sarpal
Learn the nuances of business plans, business projections and business valuations. Make the most of the start-up boom and ensure you are on the right track. For all those who own, run or help to run a business.
This document covers the topics of appraisals, valuation principles, and the appraisal process. It discusses what an appraisal is, different types of value, factors that influence value, and principles of valuation. The appraisal process involves defining the problem, gathering and analyzing data on sales comparisons and property details, and using the cost, sales comparison, and income approaches to determine property value. It also discusses appraiser regulations, licenses, and professional organizations.
The document discusses the concept of "Running Lean", which is a systematic process for iterating a startup's web application from the initial "Plan A" to a plan that works. It involves using techniques from Customer Development, Lean Startup, and Bootstrapping. The key aspects are validating problems and solutions with customers, achieving product/market fit through iterative releases, and optimizing for scale once fit is achieved. Progress is measured through validated learning loops involving hypotheses, experiments, qualitative/quantitative validation, dashboards, and communication of learnings. The overall goal is to iterate quickly from the initial plan to one that works through a continuous process of customer feedback and validation.
15. August 4, 2016~Hillsboro, Oregon
• Direct subtraction method: the concluded
value of the taxpayer intangible assets is
subtracted from the concluded taxpayer unit
value. The result is the value of the tangible
assets only.
• Transfer price (income allocation) method:
assumes an economic rent is charged to the
taxpayer intangible assets; and that “capital
charge” is subtracted from the total taxpayer
income
Intangible Asset Extraction Procedures
19
16. August 4, 2016~Hillsboro, Oregon
ABC– Intangible Assets in the Income Approach
Intangible Asset IA Valuation Method Indicated
Value
Trade Secrets (proprietary
manufacturing process)
Income approach – Direct
capitalization method
$17 million
Favorable Contract with
Supplier
Income approach – Yield
capitalization method
$7 million
Trained and Assembled
Workforce
Cost approach – RCNLD* method $4 million
Licenses and Permits Cost approach – RCNLD method $2 million
16
The value of the ABC intangible asset was estimated at $30 million, or
24 percent of the total ABC unit value.
*RCNLD = Replacement Cost New Less Depreciation
50. August 4, 2016~Hillsboro, Oregon
Calculating Capital Expenditures and
Depreciation Expense
• Capital Expenditures = Initial Capex × (1 + LTG)^Life
• Depr. Expense = FV(LTG, Life, (Capex ÷ Life))×(1 + (LTG ÷ 2))
• Where:
– FV = future value
– Initial Capex = normalized capital expenditures
– Life = depreciable life of the property, plant, and equipment
– LTG = long‐term growth rate of cash flow
• The ratio of normalized depreciation expense and capital
expenditures is based on the results of these two formulas
• Source: James R. Hitchner, Shannon P. Pratt, and Jay E. Fishman, A
Consensus View, Q&A Guide to Financial Valuation (New Jersey:
Valuation Products and Services, 2016), 18‐23.
50
51. August 4, 2016~Hillsboro, Oregon
ABC Capital Expenditures and Depr. Expense
• Inputs:
– Initial cap ex: $4.0 million
– Life of assets: 10 years
– LTG: 4.0%
• Calculated capital expenditures: $5.9 million
• Depreciation expense: $4.9 million
• Depreciation expense is equal to 82.7% of capital expenditures in
perpetuity in order to sustain growth of 4.0%.
51
Net Income 10.0
‐ Capital Expenditures (4.0)
+ Depreciation Expense 3.3
= Net Operating Cash Flow 9.3