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Valuation of Company

  • 15-10-2008 12:27pm
    #1
    weshtawake
    Registered Users, Registered Users 2 Posts: 144 ✭✭


    I am wondering if there is a standard or rule of thumb multiple of Turnover used by investors when valuing a manufacturing company??
    I have an idea it might be 2 times turnover??


Comments

  • #2
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    not that simple.

    you have to drill down and look at the debts and oblidgations. You could have acompany turning over 20million anually with debts of 100 million which would probably channge hands for a nominal sum- a pound say.

    There are a number of formulas for this purposes. I'm sure someone with more accounting knowledge than me can assist.


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


    7 X Net Profit


  • #4
    Cyrus
    Registered Users, Registered Users 2 Posts: 20,472 ✭✭✭✭Cyrus


    company valuations can take various forms, but for a company with maintainable earnings it normally comes down to a multiple of EBIT or EBITDA


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