A Comparison of the Earnings Capitalization and the Excess Earnings Models in the Valuation of Closely-Held Businesses
实证比较了收益资本化模型和超额收益模型在非公开持股企业估值中的准确性，发现超额收益模型可能更优，为估值实务提供参考。
Closely-held businesses are valued for many tax, legal, and business reasons. Recent growth in use of employee retirement plans that invest in common stock of sponsoring closely-held company (Employee Stock Ownership Plans(1)) has resulted in need for annual valuations of these companies for compliance with U.S. tax and pension regulations (Pratt 1993). These plans require annual valuations to determine market value of stock donated to plan and to determine price to be paid to retiring employees. Litigation is another reason for valuations. Many jurisdictions have adopted equitable distribution laws requiring businesses that are owned by one spouse to be treated as marital property and valued in connection with divorce actions. This is an important and growing cause for valuations (Pratt 1993). Legislation and case law protecting minority interest shareholders require corporations to repurchase shares of oppressed minority shareholders at an appraised fair value. Currently, all states in U.S. except for West Virginia provide this type of relief to minority shareholders (Pratt 1993). These requirements, in addition to continuing needs in areas of financial planning, estate and gift taxation, and actual transfers of ownership, have resulted in a large and growing demand for valuation of closely-held businesses. There is a variety of models available for valuing small businesses. In choosing appropriate models in any particular situation, an appraiser must make judgments regarding which models will most accurately predict market value. Little empirical guidance is available in literature to assist in this judgment. This paper presents results of an empirical test comparing two of most commonly used models - earnings capitalization model and excess earnings model. (In addition to these models, there are discounted cash flows model, models based on assets such as net asset value and liquidation value, and models that consider comparable sales of same or similar companies(2).) The second section of this paper discusses underlying concepts of two of most widely used valuation models. The third section describes previous empirical work. The fourth section describes test used to compare applicability of excess earnings model to earnings capitalization model, and final section summarizes results and conclusions reached. UNDERLYING CONCEPTS The objective of a valuation of a business is to estimate its fair market value, that is, the price at which property would change hands between a willing buyer and willing seller when former is not under any compulsion to buy and latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts (IRS Revenue Ruling, 59-60). For publicly-traded companies, fair market value is demonstrated in market transactions. However, since there is no market for closely-held companies, some other method of estimating value is necessary. Two commonly used models for valuing small businesses are those based upon present value of future benefits. Three other models often considered by appraisers are discounted cash flows, earnings capitalization, and excess earnings. Small business literature provides strong theoretical support for Discounted Cash Flow (DCF) model (Carland and White 1980; Lloyd and Hand 1982; Burns and Walker 1991). However, DCF model has only limited usage in practice. Carland and White suggest that infrequent use of DCF model is due to its complexity. Pratt (1993) argues that its infrequent use is due to difficulty in estimating future cash flows. Lippitt and Mastracchio (1993) examine relationship between DCF and Earnings Capitalization (EC) and demonstrate that in many situations models result in similar values if treatment of capital assets under EC model is modified using estimates that are readily available from within historical cost accounting system. …