Valuation of businesses by marie.madero

What
The amount a business is worth to a stakeh­older or any other interested party.
Expect­ation gap the placing of a higher value on a company from a seller than the one of a buyer.

Why
^{Planning a sale, Takeover, Merging, Demerger or management buy-out, Flotation, Securing Loans, Divorce settle­ment, inheri­tance tax (if applic­able), curiosity, compar­isons}

Market capita­liz­ation = share price * number of shares issued
Capita­lized earnings= price/­ear­nings ratio * mainta­inable earnings
Discounted Cash Flow
Net Assets= (fixed assets + current assets­)/-­(cu­rrent long term liabil­ities)
Return on Investment = Mainta­inable operating profit­/pu­rchase price
Pricing Curve

- Share price doesn't exactly reflect the perfor­mance of a business.
- True value of assets may not appear @balance sheet
- DCF method requires human judging
- Human Judgment