How to value a company or learning what a business is worth is on every business owners mind, more so than ever in the past few weeks. Exceeding even the wildest gyrations seen on Dancing With The Stars, the stock market antics has many of you calling in asking for guidance, opinions and for some, needed prodding to get out from under the desk. So what is going on and what is the impact on how buyers are going to value a company they may have in their targets?
At the macro level its difficult to spin any report in a positive manner. Lurking just beneath the surface lies numerous festering wounds that need attention. European countries and its banks are in a real tight spot and without the aid of more bailouts, a moral hazard few will continue to tolerate, defaults are likely. In this country Bank of America finally admitted with its acceptance of a very expensive $5 billion from Mr. Buffet that it is broke. They continue to raise capital they claim was not needed by selling off assets. Not helping is the continued decline of real estate and the lack of any activity even at these ultra low interest rates. Throw in some very poor consumer confidence , a negative GDP when using the CPI number (revised GDP less CPI= Negative) and stagnant unemployment it has all the signs of a recession.
Buyers these days are like those participants on Hillbilly Handfishin who are squeamishly treading murky waters while being asked to stick their hands in some hole hoping its not going to hurt when its chewed off. Most buyers simply won’t participate. Those that remain in the water are going to seek further relief from the risk they are taking. Therefore, how to value a company in these uncertain times requires an understanding of the various methods listed below. If you would like to learn more in depth about each method and how we may value your internet, software, SaaS, cloud or technology company, please complete the short form below.
How to Value A Company
- Basic Methodology
- Company Valuation Using Rule of Thumb Methodology
- Analysis of Capitalized Earnings
- Analysis of Excess Earnings Methodology
- Analysis of Cash Flow Methodology
- Analysis of Balance Sheet & Tangible Assets Listed Methodology
- Build vs Buy Approach
- Analysis of Intangible Assets Methodology