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putting a price on a business

  • 15-02-2008 4:55pm
    #1
    poolfc
    Closed Accounts Posts: 23 ✭


    Hi

    Is a quick quide to the price of a business Total Assets less total Liabilities?

    Thanks


Comments

  • #2
    MartMax
    Registered Users, Registered Users 2 Posts: 1,667 ✭✭✭MartMax


    price of a business? u mean valuing a business for sale? there are many approach for business valuation for e.g. assets based, future cash flow, etc.

    Marty


  • #3
    Mr. Presentable
    Closed Accounts Posts: 9,496 ✭✭✭Mr. Presentable


    The worth of a business for sale is generally seven times its last reported profit.


  • #4
    Hanley
    Banned (with Prison Access) Posts: 21,981 ✭✭✭✭Hanley


    nipplenuts wrote: »
    The worth of a business for sale is generally seven times its last reported profit.

    What if the business has a large amount of assests but not so much profits/cashflow?

    I know you said "generally" but it seems like a very limited use. Could be good as a starting point tho...?


  • #5
    chump
    Closed Accounts Posts: 3,807 ✭✭✭chump


    fair value of assets, less liabilities, plus discounted future profits?

    :D


  • #6
    pa daly
    Closed Accounts Posts: 98 ✭✭pa daly


    What about taking Goodwill into account


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  • #7
    Hanley
    Banned (with Prison Access) Posts: 21,981 ✭✭✭✭Hanley


    pa daly wrote: »
    What about taking Goodwill into account

    It should be included in total assets as an intangible. Very hard to subjectively measure before the sale tho. And very volatile too I would imagine.

    I wonder how much of a need there is to do that tho if you're taking into a account future discounted profits?

    Anyone care to shed some light?


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