market value

Examples of market value in the following topics:

• Market Value vs. Book Value

  • Book value is the price paid for a particular asset, while market value is the price at which you could presently sell the same asset.
  • Market value is often used interchangeably with open market value, fair value, or fair market value.
  • In many cases, the carrying value of an asset and its market value will differ greatly.
  • If the asset is valued on the balance at market value, then its book value is equal to the market value.
  • Ways of measuring the value of assets on the balance sheet include: historical cost, market value or lower of cost or market.

• Maximizing Shareholder and Market Value

  • A goal of financial management can be to maximize shareholder wealth by paying dividends and/or causing the market value to increase.
  • There are several goals of financial management, one of which is maximizing shareholder and market value .
  • Thus, one interpretation of proper financial management is that the agents are oriented toward the benefit of the principals - shareholders - in increasing their wealth by paying dividends and/or causing the stock price or market value to increase.
  • The idea of maximizing market value is related to the idea of maximizing shareholder value, as market value is the price at which an asset would trade in a competitive auction setting; for example, returning value to the shareholders if they decide to sell shares or if the firm decides to sell.
  • Maximizing shareholder and market value is, for some, one of the goals of financial management.

• MVA and EVA

  • MVA = PV (EVAs); MVA is the difference between current market value and investors' capital., and EVA is an estimate of a firm's economic profit.
  • Market Value Added (MVA) is the difference between the current market value of a firm and the capital contributed by investors.
  • The amount of value added needs to be greater than the firm's investors could have achieved investing in the market portfolio, adjusted for the leverage (beta coefficient) of the firm relative to the market.
  • where: MVA is market value added, V is the market value of the firm, including the value of the firm's equity and debt, and K is the capital invested in the firm.
  • The firm's market value added, or MVA, is the discounted sum (present value) of all future expected economic value added: MVA = Present Value of a series of EVA values.

• The Weightings

  • MVe stands for the market value of equity; MVd stands for the Market Value of Debt; Re stands for cost of equity; Rd stands for cost of debt; and t is the company's tax rate.
  • If the person analyzing a company chooses or if the market value of a company's debt and equity is not available, the book value can be used.
  • Market value is the price at which an asset would trade in a competitive auction setting.
  • For market price to equal market value, the market must be efficient and rational.
  • Market value also requires the element of "special value" to be disregarded.

• Lower of Cost or Market

  • In lower of cost or market (LCM), inventory items are written down to market value when the market value is less than the cost of the items.
  • The criterion for reporting this is the current market value.
  • Under LCM, inventory items are written down to market value when the market value is less than the cost of the items.
  • The company then values each class at lower its cost or market amount.
  • Explain how a would use the Lower of Cost or Market to value inventory

• Competition Based on Value

  • Value-based marketing allows organizations to create and sustain differentiating values that enable them to compete within their markets.
  • For a firm to deliver value to its customers, it must consider what is known as the "total market offering. " This comprises the organization's reputation, staff representation, product benefits, and technological characteristics as compared to competitors' market offerings and prices.
  • Value can thus be defined as the relationship of a firm's market offerings to those of its competitors.
  • TCVM helps businesses create and sustain differentiating value, enabling them to compete within their markets.
  • State what is important when shifting to a competition based on value marketing perspective

• Adding Value

  • Louis Vuitton is a prime example of how marketing adds value.
  • A main goal of marketing is to add value to an organization.
  • Marketing also aims to present the value an organization's products can add to a consumer's life.
  • It is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behavior and providing superior customer value.
  • Value in marketing can be defined by both qualitative and quantitative measures.

• A Brief Definition

  • Promotion – how the producer communicates the value of its products – is one of the market mix elements.
  • Promotion – how the producer communicates the value of its products – is one of the market mix elements.
  • These elements are personal selling, advertising, sales promotion, direct marketing, and publicity.

• Service Marketing Management and Metrics

  • Service marketing management oversees the implementation of marketing programs, while metrics measure their effectiveness and performance.
  • Marketing management is a business discipline which is focused on the practical application of marketing techniques and the management of a firm's marketing resources and activities.
  • Tasks for marketing management may include conducting a competitor and value chain analysis, putting together a brand audit, and assembling qualitative and quantitative research.
  • Overseeing the successful development and execution of the marketing plan falls under service marketing management roles.
  • Marketers use these metrics and performance measurement as way to prove value and demonstrate the contribution of marketing to the organization.

• Types of Financial Markets

  • Examples of financial markets include capital markets, derivative markets, money markets, and currency markets.
  • There are many different ways to divide and classify financial markets: for example, into general markets and specialized markets, capital markets and money markets, and primary and secondary markets.
  • A key division within the capital markets is between the primary markets and secondary markets.
  • While capital markets and money markets constitute the narrower definition of financial markets, other markets are often included in the more general sense of the word.
  • Currency markets, enabled by foreign exchange (or forex) markets enable currency conversion and determine the relative value of world currencies.