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68-563: The DWS Group (Formerly: Deutsche Asset Management) commonly referred to as DWS , is a German asset management company. It previously operated as part of Deutsche Bank until 2018 where it became a separate entity through an initial public offering on the Frankfurt Stock Exchange . It is currently headquartered in Frankfurt, Germany and is a constituent member of the SDAX index. DWS

136-711: A dividend based valuation is often employed. This is in contrast to the more typical approach of discounting free cash flow to the Firm where EBITDA less capital expenditures and working capital is discounted at the weighted average cost of capital , which incorporates the cost of debt . For a multiple based valuation, similarly, price to earnings is preferred to EV/EBITDA . Here, there are also industry-specific measures used to compare between investments and within sub-sectors; this, once normalized by market cap (or other appropriate result), and recognizing regulatory differences: Mismarking in securities valuation takes place when

204-448: A buyer often performs due diligence to verify the seller's information. Financial statements prepared in accordance with generally accepted accounting principles (GAAP) show many assets based on their historic costs rather than at their current market values. For instance, a firm's balance sheet will usually show the value of land it owns at what the firm paid for it rather than at its current market value. But under GAAP requirements,

272-440: A company). Valuation is a subjective exercise, and in fact, the process of valuation itself can also affect the value of the asset in question. Valuations may be needed for various reasons such as investment analysis , capital budgeting , merger and acquisition transactions, financial reporting , taxable events to determine the proper tax liability. In a business valuation context, various techniques are used to determine

340-446: A constrained budget environment require a prioritization scheme. As a way of illustration, the recent development of renewable energy has seen the rise of effective asset managers involved in the management of solar systems (solar parks, rooftops, and windmills). These teams often collaborate with financial asset managers in order to offer turnkey solutions to investors. Infrastructure asset management became very important in most of

408-401: A financial statement element such as a firm's earnings (price-to-earnings) or book value (price-to-book value) but multiples can be based on other factors such as price-per-subscriber. The third-most common method of estimating the value of a company looks to the assets and liabilities of the business. At a minimum, a solvent company could shut down operations, sell off the assets, and pay

476-566: A firm must show the fair values (which usually approximates market value) of some types of assets such as financial instruments that are held for sale rather than at their original cost. When a firm is required to show some of its assets at fair value, some call this process " mark-to-market ". But reporting asset values on financial statements at fair values gives managers ample opportunity to slant asset values upward to artificially increase profits and their stock prices. Managers may be motivated to alter earnings upward so they can earn bonuses. Despite

544-490: A function of the property's "reserve" - the estimated size and grade of the deposit in question - and the complexity and costs of extracting this. CIMVal generally applied by the Toronto Stock Exchange , is widely recognized as a "standard" for the valuation of mining projects. (CIMVal: Canadian Institute of Mining, Metallurgy and Petroleum on Valuation of Mineral Properties ) The Australasian equivalent

612-763: A purchase of newer hardware. Large companies such as Oracle , that license software to clients distinguish between the right to use and the right to receive maintenance/support. Valuation (finance)#Net asset value method In finance , valuation is the process of determining the value of a (potential) investment, asset, or security. Generally, there are three approaches taken, namely discounted cashflow valuation, relative valuation, and contingent claim valuation. Valuations can be done for assets (for example, investments in marketable securities such as companies' shares and related rights, business enterprises, or intangible assets such as patents , data and trademarks ) or for liabilities (e.g., bonds issued by

680-446: A regulated industry—and are usually not required to have their financial statements audited. Moreover, managers of private firms often prepare their financial statements to minimize profits and, therefore, taxes . Alternatively, managers of public firms tend to want higher profits to increase their stock price. Therefore, a firm's historic financial information may not be accurate and can lead to over- and undervaluation. In an acquisition,

748-448: A result of ceased operations. An alternative approach to the net asset value method is the excess earnings method. (This method was first described in the U.S. Internal Revenue Service 's Appeals and Review Memorandum 34, and later refined by Revenue Ruling 68-609 .) The excess earnings method has the appraiser identify the value of tangible assets, estimate an appropriate return on those tangible assets, and subtract that return from

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816-414: A stock's intrinsic value is greater (or less) than its market price, an analyst makes a "buy" (or "sell") recommendation. Moreover, an asset's intrinsic value may be subject to personal opinion and vary among analysts. The International Valuation Standards include definitions for common bases of value and generally accepted practice procedures for valuing assets of all types. Regardless, the valuation itself

884-521: A structure of this sort is directly connected to local governance. Enterprise asset management (EAM) systems are asset information systems that support the management of an organization's assets. An EAM includes an asset registry (inventory of assets and their attributes) combined with a computerized maintenance management system (CMMS) and other modules (such as inventory or materials management). Assets that are geographically distributed, interconnected or networked, are often also represented through

952-529: Is VALMIN ; the Southern African is SAMVAL . These standards stress the use of the cost approach , market approach , and the income approach , depending on the stage of development of the mining property or project; see for further discussion and context. Real Options analysis is sometimes used when there is a need to evaluate the project under different scenarios from inception. Analyzing listed mining corporates (and other resource companies )

1020-435: Is a bond issued by small company and that bond also pays annual interest of 5%. If given a choice between the two bonds, virtually all investors would buy the government bond rather than the small-firm bond because the first is less risky while paying the same interest rate as the riskier second bond. In this case, an investor has no incentive to buy the riskier second bond. Furthermore, in order to attract capital from investors,

1088-682: Is a term synonymous with physical and infrastructure asset management, it is used to describe management of more complex physical assets which require the application of specialist asset management engineering methods over their life-cycles in order to maximize value for their owners, whilst keeping risk to an acceptable level. SAM is a sub-discipline of IT asset management . The International Organization for Standardization published its management system standard for asset management in 2014. The ISO 55000 series provides terminology, requirements, and guidance for implementing, maintaining and improving an effective asset management system. The key to forming

1156-450: Is also specialized, as the valuation requires a good understanding of the company's overall assets , its operational business model as well as key market drivers , and an understanding of that sector of the stock market . Re the latter, a distinction is usually made based on size and financial capabilities; see Mining § Corporate classifications . There are two main difficulties with valuing financial services firms. The first

1224-451: Is done generally using one or more of the following approaches: In finance, valuation analysis is required for many reasons including tax assessment, wills and estates , divorce settlements , business analysis, and basic bookkeeping and accounting . Since the value of things fluctuates over time, valuations are as of a specific date like the end of the accounting quarter or year. They may alternatively be mark-to-market estimates of

1292-403: Is not relevant. The valuation premise normally used is that of an orderly liquidation of the assets, although some valuation scenarios (e.g., purchase price allocation ) imply an " in-use " valuation such as depreciated replacement cost new. This method is most appropriate in situations where there are no significant intangible assets, or when a company is voluntarily liquidating its assets as

1360-653: Is often time-consuming and costly. If required, stock markets can give an indirect estimate of a corporation's intangible asset value: this can be reckoned as the difference between its market capitalisation and its book value (including only hard assets ), i.e. effectively its goodwill ; see also PVGO . As regards listed equity, the above techniques are most often applied in the biotech- , life sciences- and pharmaceutical sectors (see List of largest biotechnology and pharmaceutical companies ). These businesses are involved in research and development (R&D), and testing, that typically takes years to complete, and where

1428-451: Is that the cash flows to a financial service firm cannot be easily estimated, since capital expenditures , working capital and debt are not clearly defined: "debt for a financial service firm is more akin to raw material than to a source of capital; the notion of cost of capital and enterprise value may be meaningless as a consequence." (See related discussion re. the risk management of financial- vs non-financial firms.) The second

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1496-415: Is that these firms operate under a highly regulated environment , and valuation assumptions ( and model outputs ) must incorporate regulatory limits, at least as "bounds". The approach taken for a DCF valuation, is to then "remove" debt from the valuation, by discounting at the cost of equity either free cash flow to equity ( net income less any reinvestment in regulatory capital ) or excess return ;

1564-413: Is using comparative valuations, although this method can be less accurate given the uniqueness of each startup. Some methods adjust the average pre-money valuation of pre-revenue startups based on various attributes within the same market. Average pre-money valuations in a particular region or sector, obtained from recent market deals, can also serve as reference points. During Series A funding rounds ,

1632-509: The Black–Scholes model while the liabilities of life assurance firms are valued using the theory of present value . Intangible business assets, like goodwill and intellectual property , are open to a wide range of value interpretations. Another intangible asset, data , is increasingly being recognized as a valuable asset in the information economy. It is possible and conventional for financial professionals to make their own estimates of

1700-473: The Frankfurt Stock Exchange . However, despite being a separate company, the majority of DWS shares are still held by Deutsche Bank at 79.49%. In October 2018, DWS named Asoka Woehermann as the replacement for former CEO Nicolas Moreau. In 2022, Asoka Wöhrmann resigned from his post of CEO after the company's offices in Frankfurt were raided by police. He was replaced by Stefan Hoops who was previously head of

1768-472: The USA , Asia and other regions. Originally Deutsche Bank held 30% of DWS while the rest was held by other financial institutions . However, by 2004, DWS was wholly owned by Deutsche Bank. In 2009, DWS took control over Rosenberg Real Estate Equity Funds (RREEF) which was also owned by Deutsche Bank. In 2012, Deutsche Bank announced the establishment of its Asset & Wealth Management (AWM) division which DWS

1836-508: The creditors . Any cash that would remain establishes a floor value for the company. This method is known as the net asset value or cost method. In general the discounted cash flows of a well-performing company exceed this floor value. Some companies, however, are worth more "dead than alive", like weakly performing companies that own many tangible assets. This method can also be used to value heterogeneous portfolios of investments, as well as nonprofits , for which discounted cash flow analysis

1904-410: The incremental contribution of patents (etc) to equity value; see next paragraph. Since few sales of benchmark intangible assets can ever be observed, one often values these sorts of assets using either a present value model, or by estimating the cost of recreating the asset in question . In some cases, option-based techniques or decision trees may be applied. Regardless of the method, the process

1972-544: The time value of money . For instance, an asset that matures and pays $ 1 in one year is worth less than $ 1 today. The size of the discount is based on an opportunity cost of capital and it is expressed as a percentage or discount rate . In finance theory, the amount of the opportunity cost is based on a relation between the risk and return of some sort of investment. Classic economic theory maintains that people are rational and averse to risk. They, therefore, need an incentive to accept risk. The incentive in finance comes in

2040-503: The (hypothetical) price that a third party would pay for a given company; while in a portfolio management context , stock valuation is used by analysts to determine the price at which the stock is fairly valued relative to its projected and historical earnings, and to thus profit from related price movement. Common terms for the value of an asset or liability are market value , fair value , and intrinsic value . The meanings of these terms differ. For instance, when an analyst believes

2108-758: The Asset Management Council (AMC), the World Partners in Asset Management (WPiAM), Society for Maintenance and Reliability Professionals (SMRP), the Institute of Asset Management (IAM), the International Society of Engineering Asset Management (ISEAM), and the Global Forum on Maintenance and Asset Management (GFMAM). Engineering asset management is a more recent term that is used to describe

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2176-706: The Chartered Business Valuator (CBV) offered by the CBV Institute , ASA and CEIV from the American Society of Appraisers , and the CVA by the National Association of Certified Valuators and Analysts. This method estimates the value of an asset based on its expected future cash flows, which are discounted to the present (i.e., the present value). This concept of discounting future money is commonly known as

2244-605: The DWS. In 2021, The Wall Street Journal reported that the United States Department of Justice and U.S. Securities and Exchange Commission were investigating DWS' claims of sustainable investing. In September 2023, DWS agreed to pay $ 25 million to settle the SEC's charges that DWS failed to develop a mutual fund anti-money laundering program and made misstatements regarding its ESG investment process. DWS did not admit or deny

2312-420: The SEC's findings in its settlements. The greenwashing complaint was led by DWS's previous head of ESG, Desiree Fixler. The DWS's "ESG integration policy" labelled €459bn in assets as green. Adjusting the measurement criteria resulted in a 75 per cent fall in assets reported as green. DWS Investments UK sponsored English professional football club, Aston Villa F.C. from 2004 to 2006. After DWS Investments UK

2380-416: The application of an asset management system, in accordance with the requirements of ISO 55001. The most frequent usage of the term portfolio manager (asset manager) refers to investment management , the sector of the financial services industry that manages investment funds and segregated client accounts . Asset management is part of a financial company that employs experts who manage money and handle

2448-583: The business , with the valuation reflecting its potential thereafter , or (ii) to purchase the company - or its debt - at a discount, as part of an Investment Strategy aimed at realizing a profit on recovery . Preliminary to the valuation, the financial statements are initially recast , to "better reflect the firm's indebtedness, financing costs and recurring earnings". Here adjustments are made to working capital , deferred capital expenditures , cost of goods sold , non-recurring professional fees and costs, above- or below-market leases, excess salaries in

2516-469: The business world, and public infrastructure sectors to ensure a coordinated approach to the optimization of costs, risks, service/performance, and sustainability. The term has traditionally been used in the financial sector to describe people and companies who manage investments on behalf of others. Those include, for example, investment managers who manage the assets of a pension fund . The ISO 55000 series of standards, developed by ISO TC 251 , are

2584-629: The case of private companies , and certain non-operating income/expense items. The valuation is built on this base, with any of the standard market-, income-, or asset-based approaches employed. Often these are used in combination, providing a "triangulation" or (weighted) average. Particularly in the second case above, the company may be valued using real options analysis , serving to complement (or sometimes replace) this standard value; see Business valuation § Option pricing approaches and Merton model . As required, various adjustments are then made to this result, so as to reflect characteristics of

2652-467: The constraints upon such licenses, e.g. a period. If, for example, one licenses software, often the license is for a given period. Adobe and Microsoft both offer time-based software licenses. In both the corporate and consumer worlds, there is a distinction between software ownership and the updating of software. One may own a version of the software, but not newer versions of the software. Cellular phones are often not updated by vendors, in an attempt to force

2720-412: The corporate bank at Deutsche Bank. A DWS annual report in 2020 claimed that half of the company's assets ran through environmental, social and corporate governance (ESG) criteria. An internal report contradicted this, and stated that only a small amount of the firm's investments applied ESG. As a result of the probe, German regulators began investigating Deutsche Bank president Karl von Rohr's role in

2788-725: The current value of assets or liabilities as of this minute or this day for the purposes of managing portfolios and associated financial risk (for example, within large financial firms including investment banks and stockbrokers). Some balance sheet items are much easier to value than others. Publicly traded stocks and bonds have prices that are quoted frequently and readily available. Other assets are harder to value. For instance, private firms that have no frequently quoted price. Additionally, financial instruments that have prices that are partly dependent on theoretical models of one kind or another are difficult to value and this generates valuation risk . For example, options are generally valued using

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2856-458: The definition of enterprise asset management (EAM) by incorporating the management of all things of value to a municipal jurisdiction and its citizens' expectations. An example in which public asset management is used is land-use development and planning. Increasingly both consumers and organizations use assets, e.g. software, music, books, etc. where the user's rights are constrained by a license agreement. An asset management system would identify

2924-461: The degree of reliability of the result and make their decision. Businesses or fractional interests in businesses may be valued for various purposes such as mergers and acquisitions , sale of securities , and taxable events. When correct, a valuation should reflect the capacity of the business to match a certain market demand, as it is the only true predictor of future cash flows. An accurate valuation of privately owned companies largely depends on

2992-499: The developed countries in the 21st century, since their infrastructure network was almost completed in the 20th century and they have to manage to operate and maintain them cost-effectively. Physical, or Infrastructure Asset Management is a growing specialist engineering discipline, with many international technical societies now established to advance knowledge in this area, including the Engineers Australia technical society of

3060-451: The firm external to its profitability and cash flow. These adjustments consider any lack of marketability resulting in a discount, and re the stake in question, any control premium or lack of control discount . Balance sheet items external to the valuation, but due to the new owners, are similarly recognized; these include excess (or restricted) cash, and other non-operating assets and liabilities. Startup companies such as Uber , which

3128-418: The form of higher expected returns after buying a risky asset. In other words, the more risky the investment, the more return investors want from that investment. Using the same example as above, assume the first investment opportunity is a government bond that will pay interest of 5% per year and the principal and interest payments are guaranteed by the government. Alternatively, the second investment opportunity

3196-403: The future cash flows from the investment and then estimates a reasonable discount rate after considering the riskiness of those cash flows and interest rates in the capital markets . Next, one makes a calculation to compute the present value of the future cash flows. This method determines the value of a firm by observing the prices of similar companies (called "guideline companies") that sold in

3264-429: The international standards for Asset Management. ISO 55000 provides an introduction and requirements specification for a management system for asset management. The ISO 55000 standard defines an asset as an "item, thing or entity that has potential or actual value to an organization". ISO 55001 specifies requirements for an asset management system within the context of the organization, and ISO 55002 gives guidelines for

3332-563: The investments of clients. This is done either actively or passively. Physical and Infrastructure asset management is the combination of management, financial, economic, engineering, and other practices applied to physical assets to provide the best value level of service for the costs involved. It includes the management of the entire life cycle—including design, construction, commissioning, operating, maintaining, repairing, modifying, replacing, and decommissioning/disposal—of physical and infrastructure assets. Operation and maintenance of assets in

3400-642: The management of complex physical assets, a specific engineering practice that is concerned with optimizing assets, in the context of the organizations goals and objectives, through using multidiscipline engineering methodologies, and Terotechnology (which includes management, engineering, and financial expertise), to balance cost, risk, and performance. Engineering asset management includes multiple engineering disciplines, including but not limited to maintenance engineering , systems engineering , reliability engineering , process safety management , industrial engineering , and risk analysis . Engineering asset management

3468-482: The market. Those sales could be shares of stock or sales of entire firms. The observed prices serve as valuation benchmarks. From the prices, one calculates price multiples such as the price-to-earnings or price-to-book ratios—one or more of which used to value the firm. For example, the average price-to-earnings multiple of the guideline companies is applied to the subject firm's earnings to estimate its value. Many price multiples can be calculated. Most are based on

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3536-471: The new product may ultimately not be approved (see Contingent value rights ). Industry specialists thus apply the above techniques - and here especially rNPV - to the pipeline of products under development, and, at the same time, also estimate the impact on existing revenue streams due to expiring patents . For relative valuation, a specialized ratio is R&D spend as a percentage of sales. Similar analysis may be applied to options on films re

3604-504: The prevailing share or bond prices, where applicable, and may or may not result in buying or selling by market participants. Where the valuation is for the purpose of a merger or acquisition the respective businesses make available further detailed financial information, usually on the completion of a non-disclosure agreement . Valuation requires judgment and assumptions: Users of valuations benefit when key information, assumptions, and limitations are disclosed to them. Then they can weigh

3672-402: The reliability of the firm's historic financial information. Public company financial statements are audited by Certified Public Accountants (USA), Chartered Certified Accountants ( ACCA ) or Chartered Accountants (UK), and Chartered Professional Accountants (Canada) and overseen by a government regulator. Alternatively, private firms do not have government oversight—unless operating in

3740-414: The risk of manager bias, equity investors and creditors prefer to know the market values of a firm's assets—rather than their historical costs—because current values give them better information to make decisions. There are commonly three pillars to valuing business entities: comparable company analyses, discounted cash flow analysis, and precedent transaction analysis. Business valuation credentials include

3808-413: The small firm issuing the second bond must pay an interest rate higher than 5% that the government bond pays. Otherwise, no investor is likely to buy that bond and, therefore, the firm will be unable to raise capital. But by offering to pay an interest rate more than 5% the firm gives investors an incentive to buy a riskier bond. For a valuation using the discounted cash flow method, one first estimates

3876-531: The total return for the business, leaving the "excess" return, which is presumed to come from the intangible assets. An appropriate capitalization rate is applied to the excess return, resulting in the value of those intangible assets. That value is added to the value of the tangible assets and any non-operating assets, and the total is the value estimate for the business as a whole. See Clean surplus accounting , Residual income valuation . The approaches to valuation outlined above, are generic and will be modified for

3944-653: The typical physical assets or infrastructure assets, the soft assets might include permits, licenses, brands, patents, right-of-ways, and other entitlements or valued items. The EAM system is only one of the 'enablers' of good asset management. Asset managers need to make informed decisions to fulfill their organizational goals, this requires good asset information but also leadership, clarity of strategic priorities, competencies, inter-departmental collaboration and communications, workforce, and supply chain engagement, risk and change management systems, performance monitoring, and continual improvement. Public asset management expands

4012-639: The typical valuation for startups is reported to be between $ 10 million to $ 15 million Valuation models can be used to value intangible assets such as for patent valuation , but also in copyrights , software , trade secrets , and customer relationships. As economies are becoming increasingly informational, it is recognized that there is a need for new methods to value data , another intangible asset. Valuations here are often necessary both for financial reporting and intellectual property transactions. They are also inherent in securities analysis - listed and private - in cases where analysts must estimate

4080-426: The unique positioning and characteristics of the business in question. In the below cases, however, more specific valuation-practices have developed within the investment industry . To these, more than elsewhere, real options valuation may be applied; see Business valuation § Option pricing approaches . Investors in a suffering company , or in other " distressed securities ", may intend (i) to restructure

4148-403: The use of geographic information systems (GIS) . GIS-centric asset registry standardizes data and improves interoperability, providing users the capability to reuse, coordinate, and share information efficiently and effectively. A GIS platform combined with information of both the "hard" and "soft" assets helps to remove the traditional silos of departmental functions. While the hard assets are

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4216-464: The valuation of film studios . In mining , valuation is the process of determining the value or worth of a mining property - i.e. as distinct from a listed mining corporate. Mining valuations are sometimes required for IPOs , fairness opinions , litigation, mergers and acquisitions, and shareholder-related matters. In valuing a mining project or mining property, fair market value is the standard of value to be used. In general, this result will be

4284-483: The valuations of assets or liabilities that they are interested in. Their calculations are of various kinds including analyses of companies that focus on price-to-book, price-to-earnings, price-to-cash-flow and present value calculations, and analyses of bonds that focus on credit ratings, assessments of default risk , risk premia , and levels of real interest rates . All of these approaches may be thought of as creating estimates of value that compete for credibility with

4352-437: The value that is assigned to securities does not reflect what the securities are actually worth, due to intentional fraudulent mispricing. Mismarking misleads investors and fund executives about how much the securities in a securities portfolio managed by a trader are worth (the securities' net asset value , or NAV), and thus misrepresents performance. When a rogue trader engages in mismarking, it allows him to obtain

4420-452: Was bought out by Aberdeen Asset Management , DWS decided it would not renew its sponsorship contract as it had no more business links with the UK. Asset management Theory of asset management primarily deals with the periodic matter of improving, maintaining or in other circumstances assuring the economic and capital value of an asset over time. The term is commonly used in engineering,

4488-666: Was founded in Hamburg in 1956 as "Deutsche Gesellschaft für Wertpapiersparen mbH" (German Enterprise for Securities Savings), the name was later shortened to DWS, "Die Wertpapier Spezialisten" (The Fund Specialists). Originally, the activities involved products and investment services that were initially offered to investors in Germany and throughout Europe. Activities under the DWS Investments brand were later expanded to include separate line-ups of products and investments services for investors in

4556-474: Was fully integrated into. The DWS brand name was retained as the name for the German retail business. However, in 2015, AWM was split into Deutsche Asset Management and Deutsche Bank Wealth Management. In 2017, Deutsche Asset Management was rebranded to DWS with Deutsche Bank planning to publicly list a minority stake of it. In 2018, DWS was spun off as a separate company through an initial public offering on

4624-892: Was valued at $ 50 billion in early 2015, are assigned post-money valuations based on the price at which their most recent investor put money into the company. The price reflects what investors, for the most part venture capital firms, are willing to pay for a share of the firm. They are not listed on any stock market, nor is the valuation based on their assets or profits, but on their potential for success, growth, and eventually, possible profits. Many startup companies use internal growth factors to show their potential growth which may attribute to their valuation. The professional investors who fund startups are experts, but hardly infallible, see Dot-com bubble . Valuation using discounted cash flows discusses various considerations here. The valuation of early-stage startups can be more nuanced due to their lack of established track records. One common approach

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