Friday, 23 April 2010

How much should you pay for a business? Valuing a company (1)

How should we put a value on what a company is worth? 

There is only one accurate answer to this question - whatever someone is prepared to pay! In evaluating 'worth' we must consider a number of alternatives.

Though we often look at financial measures, we must never forget the non-financial measures too. These factors can far outweigh any financial appraisal, as it is only based on a company's past track record rather than its future potential.

When putting a value on a company, always consider more than one measure, to allow a 'reality check' on the methods being used.

Also read:

Valuing a company (1)

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