Diamonds Forbes 2010
During the cycle of Forbes Diamonds, Avallon was a partner of over 15 conferences taking place across Poland. The aim of Forbes Diamonds ranking was to identify businesses with the greatest growth in value between 2005 and 2008.
Dun & Bradstreet Polska gathered information on subjects who submitted reports to the National Court Register in 2010. Based on this, a database of companies was created and Dun & Bradstreet Polska provided a credibility rating of these companies regarding:
– Profitability (based on EBIT and ROA)
– the level of cash flow, and timely payment of debts
– demonstrate a positive financial result and the value of equity in 2007-2009
Finance companies were excluded, because of the difference in the balance sheet categories between them and production or trading companies and institutions in the financial sector.
The Diamond list consisted of companies whose values was increasing the most rapidly. The value of a company was calculated according to the Swiss method which links the estate method and the income method. The first of these two does not value the potential of employees and know-how. The value on the basis of profits does not take into account, for example, seasonal adjustments.
(Developing companies, investing companies may have low profits)
Blending these two methods eliminates these disadvantages
The Enterprise value (W) is a weighted average value of their assets (Wm) and the value of income (Wd), according to the formula:
W = (Wm + 2Wd) / 3
The property was valued on the basis of the arithmetic mean of its liquidation value and net book value of the company, which corresponds to the amount of the company’s own equity minus intangible assets.
The value of this income is the average profits of the years 2007 – 2009.
The increase in the value determines a weighted average of growth in the years 2008-2009 as two times more important than the years 2007-2008.