Relationship between Variations in Valuation Methodologies

complicated. On the example of the construction industry, the article
tests the approach based on WACC and WARA analyses. The risk
and profitability of the specified markets were analyzed based on the
Efficient Frontier method. The Polish market and the group of
Euronext markets were selected for comparison. The necessity of
calculation of WARA based on only significant assets was
determined. The differentiation between WARA and WACC in the
Polish construction market can be overcome by maximizing goodwill
and intangible assets and minimizing tangible assets. It reveals
problems not in the stock market, but in the industry and the economy
as a whole, particularly the lack of functioning markets such as the
stock market for individual assets. The role of intangibles is different
for Euronext markets. On the other hand, the requirement of the
international accounting standards to transfer goodwill from assets to
"other income" in case of a negative value (bad will) makes adequate
consideration of goodwill in the WARA model virtually impossible.
Another problem is a calculation of relative weights of assets in
conditions of occurrence of both positive and negative values, which
creates prerequisites for different approaches and interpretations.
Building material that is used in the construction industry tries to
improve the environment. the source of building materials are natural
resources such as sandstone.