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The purpose of the paper is to focus on the rating, ranking and valuing of firms.

Fuzzy logic and expert systems are used in order to provide a score for the firm(s) under consideration, representing the firm value‐creating power.

The fuzzy expert system introduced is capable of dealing with both quantitative and qualitative variables and integrates financial, managerial and strategic variables. A sensitivity analysis corroborates the model.

The system is apt to rate and rank firms within a sector. Some regression analysis can lead to a determined price for the target firm.

The expert system may be used by rating agencies for ranking firms, and by financial analysts and potential buyers to furnish a price for acquisition.

The use of a fuzzy expert system for ranking firms within a sector and pricing firms is a first attempt at an alternative way of measuring performance and value.

In investment decision making, the net present value (NPV) rule is often used alongside the well‐known capital asset pricing model (CAPM). In particular, the use of disequilibrium NPV is endorsed in corporate finance for both valuation and decision. The purpose of this paper is to test the reliability of this approach to capital budgeting valuations and decisions.

The use of disequilibrium values for computing a project's NPV is considered, and the consistency with the CAPM is checked. The resulting valuation and decision are contrasted with the no‐arbitrage principle, which is universally considered a benchmark for rationality.

The paper finds that the disequilibrium NPV is logically deducted from the CAPM for decision‐making purposes. However, this NPV provides nonadditive values, which makes it inconsistent with the no‐arbitrage principle.

The use of the CAPM+NPV procedure for valuing projects is invalid if disequilibrium values are used. Its use for decision making is logically valid but practically unsafe, because decision makers may frame equivalent courses of action in different ways, resulting in different decisions, which implies that they may incur arbitrage losses.

The literature does not distinguish between equilibrium and disequilibrium NPV nor between valuation and decision. This paper explicitly makes this distinction and the resulting consequences are highlighted.

The paper aims to analyze the reasons for the unremarkable increase in value relevance of new impairment testing of goodwill following the introduction of new accounting standards SFAS 141 and 142.

After surveying main research about market reactions to announcements of goodwill write‐off before and after the introduction of the new SFAS the paper shows why the two‐step procedure of impairment testing risks undermining the very economic substance of the test.

The analysis shows the inadequacy of the impairment test to measure the destruction of wealth experienced by acquiring firms’ shareholders and to supply value‐relevant information owing to the lack of disclosure of information after the first stage of the test. It also shows the consequences of management's discretionary power in setting forth projections.

The paper lays the groundwork for interpreting the empirical evidence on the limited information content of goodwill write‐offs.

The aim of this paper is to answer the question: Do discounted cash flows valuation methods provide always the same value?

This paper is a summarized compendium of ten methods including: free cash flow; equity cash flow; capital cash flow; adjusted present value; business's risk‐adjusted free cash flow and equity cash flow; risk‐free rate‐adjusted free cash flow and equity cash flow; economic profit; and economic value added.

All ten methods always give the same value.

The disagreements among the various theories of firm valuation arise from the calculation of the value of the tax shields (VTS). The paper analyses nine different theories.

The paper is an analysis of ten methods of company valuation using discounted cash flows and nine different theories about the VTS.

This paper aims to discuss how firms make investment decisions and the impact of these decisions on firm value, considering the strategic impacts of such investments.

Built on real options and game‐theoretic models, simulations are used to find out how investment decisions and firm values change in face of network effects and potential competition.

It is found that high intensity of network effects lowers the investment threshold as well as the expected value of the firm at the investment threshold. It is also found that potential competition makes an innovating firm less likely to invest. Moreover, in a more competitive environment, the value of the firm when it is indifferent between investing and waiting tends to be high.

It is shown that overestimating and failure to capture the network values may lead to poor investment decisions, resulting in firms or projects with little value. The research also has important implications for the management of R&D. When an innovation is likely to face fierce competition, the owner may invest more aggressively under high uncertainty. However, if competitors are likely to provide substitutes, firms should be cautious making upfront investments under high uncertainty.

This paper discusses the implications of new developments in the field of real options to firms’ strategic investment decisions and the valuation of firms.

It is clear that some firms are more forthcoming about their financial affairs than others, and that the financial statements of some firms are designed to obscure rather than reveal information about the firms. How does one reflect the transparency (or the opacity) of a firm's financial statements in its value? This paper aims to examine both the sources of complexity in financial statements and the appropriate responses in valuation.

The paper examines both the sources of complexity in financial statements and the appropriate responses in valuation.

The paper develops a number of potential measures of complexity, ranging from a measure of opacity (developed by Price Waterhouse) to a complexity score (developed by asking a series of questions about companies).

If the value of complex firms is consistently discounted, an incentive for simpler holding structures and more transparent financial statements will be created.

While investors and analysts may increasingly bemoan the increasing complexity of financial statements, there is no simple measure of complexity. This paper considers some ways in which the complexity of a firm's financial statement can be measured.