Factors That Determine a Company's Valuation Compared to Financial Statements The internal and external factors that establish a firm's valuation can be confounding and copious. There are designated, professional agencies that are equipped to process this kind of pertinent information. Yet, the compiled financial statements don't always reflect what the perceived valuation of a firm should be. "...the valuation effects vary across stakeholders and the positive effects are driven by firms' performance on employee relations and environmental issues" (Yamen, 2010). A few of the tools utilized to comprise crucial data such as a firm's liabilities and assets are the balance sheet, statement of cash flows, and the statement of income. "The difference between a company's actual value and its book or liquidation value is often attributed to going-concern value, which refers to three factors: 1. Extra earning power, 2. Intangible assets, and 3. Value of future investments" (Brealey, Myers