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best net profit to sale price ratio?

  • 19-04-2011 12:18pm
    #1
    monkey8
    Registered Users, Registered Users 2 Posts: 386 ✭✭


    What business' or sectors have the best net profit to sale price ratio in the current economic climate?
    For example in the industry I am in, business' are being sold for 4 times the adjusted net profit.


Comments

  • #2
    yearplanner
    Closed Accounts Posts: 18 ✭yearplanner


    all the retailers on here seem to be keeping their cards close to their chest!:)


  • #3
    nipper banks
    Registered Users, Registered Users 2 Posts: 37 ✭nipper banks


    monkey8 wrote: »
    What business' or sectors have the best net profit to sale price ratio in the current economic climate?
    For example in the industry I am in, business' are being sold for 4 times the adjusted net profit.

    There is no real answer to this, as it depends on future prospects. All the art is in the adjustment to get a sustainable net profit. For example, there would be little point in paying 4 times net profit for an auctioneering business, based on historical profits, as there may not be many future sales. If you have a good basis for what you think future net profits would be a price of 4 times this would be far too cheap, even these days. It implies a return over 25%.


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