Comparative analysis of approaches to business valuation under conditions of uncertainty

Анотація

This article is devoted to a comparative analysis of approaches to business valuation under uncertainty, particularly in an unstable economic environment. The relevance of the study stems from the fact that traditional approaches to enterprise valuation were developed primarily in a relatively stable economic environment and now require critical reevaluation amid heightened uncertainty, limited market information, macroeconomic instability, and additional costs for enterprises due to armed conflict. The article systematizes theoretical concepts of enterprise value, examines the essence and characteristics of the three basic approaches to its valuation (cost, income, and comparative), and conducts a comparative analysis of their applicability under conditions of uncertainty. It has been established that the cost approach exhibits the lowest sensitivity to uncertainty because it relies on actual financial statement data; however, it cannot account for external factors, the enterprise’s future potential, or the consequences of physical asset destruction. The income approach is the most sensitive to uncertainty, as it relies on forecasting future cash flows, whose reliability is significantly reduced in an unstable environment and further burdened by high corporate costs in wartime conditions. The comparative approach faces the critical problem of a lack of market comparables and transaction data under wartime conditions, making it impossible to establish an adequate basis for comparison. The study’s findings justify a combined approach that uses the cost approach as the foundation, with elements of the income approach for risk assessment, thereby enabling the most objective and reliable valuation of a company under conditions of uncertainty. Keywords: enterprise value, business valuation, uncertainty, cost approach, income approach, comparative approach.

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