Dissertation/Thesis Abstract

Beyond the numbers: A phenomenological study of intangible assets for small manufacturing business valuation
by Thom, Randall Robert, D.B.A., University of Phoenix, 2008, 202; 3327215
Abstract (Summary)

Intangible assets have become a key factor in the valuation of today’s business enterprise (Andreou, Green, & Stankosky, 2007). Although the exact number of intangible assets may be debatable, studies have shown that intangible assets create the majority of corporate value today, and the result is that two companies that look similar based on traditional financial measures can have very different market values (Argenti, 2006). Valuation difficulties are more significant for small businesses relative to larger corporations, and research indicates that the severity of these valuation difficulties is greater for small, privately held manufacturing businesses in comparison to their publicly traded competitors (Shen & Reuer, 2005). For investors, the future prospects of a company are of far greater relevance in their valuation than is historical performance (Andriessen & Tissen, 2000). The purpose of this qualitative, phenomenological study was to explore the lived experiences of buyers of small manufacturing businesses and investigate the process they used in the valuation of the business acquired and the consideration of its intangible assets. The study used van Kaam’s method of data analysis as modified by Moustakas (1994) with audio-taped and transcribed interviews of a purposeful sample of 20 owners or significant investors of small manufacturing businesses. Data suggested that intangible assets were a significant consideration in the valuation process, and specific intangible assets, including market presence, human capital, and unique products or technology, were a driving factor in the acquisition process. Although the historical financial performance of the acquired business was important, the value proposition and decision to purchase centered around the study participants’ assessment of the company’s intangible assets and their potential impact on future performance.

Indexing (document details)
School: University of Phoenix
School Location: United States -- Arizona
Source: DAI-A 69/08, Dissertation Abstracts International
Subjects: Accounting, Management
Keywords: EBITDA, Future business performance, Human capital, Intangible assets, Manufacturing, Organizational capital, Small business, Small business valuation, Valuation
Publication Number: 3327215
ISBN: 978-0-549-79689-3
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