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Where Taxpayers and Advisers Meet

Valuation of a business

GARDNER4
Posts:67
Joined:Wed Aug 06, 2008 3:41 pm
Valuation of a business

Postby GARDNER4 » Thu Oct 28, 2010 7:10 pm

What are the different methods of valuing a business??

RAL
Posts:1064
Joined:Thu Oct 30, 2008 12:47 pm
Location:London & Surrey
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Re: Valuation of a business

Postby RAL » Thu Oct 28, 2010 8:22 pm

RAL

GARDNER4
Posts:67
Joined:Wed Aug 06, 2008 3:41 pm

Re: Valuation of a business

Postby GARDNER4 » Thu Oct 28, 2010 10:55 pm

Thanks Ral, its interesting reading. Just one question some people multiply the net profit before tax to come to a value, what is the average multiplication number and is that sensible???

Incredulum
Posts:2795
Joined:Thu Dec 03, 2009 5:35 pm

Re: Valuation of a business

Postby Incredulum » Fri Oct 29, 2010 11:14 am

That's the clever bit... choosing the right multiplier.

If you look at the stock market the P/E ratios (price:earnings ratio) of companies vary between maybe 1 and maybe 50 or more.


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