Difference between revisions of "Company Valuation"
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(Replaced content with "Company Valuation Category:mbi Category:M10 Category:Term") Tag: Replaced |
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| − | Company | + | Company valuation basically includes the following steps: |
| + | # Investor looks at money to raise | ||
| + | # Investor looks at required rates of return given the investment stage: | ||
| + | <html> | ||
| + | <img src="/static/files/MBI/Module%2010/financingecotypes.PNG" width=500> | ||
| + | </html> | ||
| + | # By looking at the required rate of return the investor calculates what he wants his money to be worth in year 'n' | ||
| + | # Then by looking at the projected value of the company from the business plan, the investor calculates what percentage of the shares he then would need. | ||
| + | # Then the share price can be calculated from the # shares and the original required investment. | ||
| + | Session audio: | ||
| + | <<AudioFragment /static/files/MBI/Module%2010/M10-S5%20-%20Explaining%20Company%20Valuation.mp3>> | ||
| + | |||
| + | Process explained in [[this|/static/files/MBI/Module%2010/Company%20valuation.xlsx]] spreadsheet (picture below: | ||
| + | <html> | ||
| + | <img src="/static/files/MBI/Module%2010/companyvaluation.PNG" width=800> | ||
| + | </html> | ||
| + | |||
| + | Company valuation 'rules of thumb' | ||
| + | {| class="wikitable" | ||
| + | !Type of business | ||
| + | !Formula | ||
| + | |- | ||
| + | |Retail | ||
| + | |3 times sales | ||
| + | |- | ||
| + | |} | ||
[[Category:mbi]] | [[Category:mbi]] | ||
Latest revision as of 19:54, 27 August 2020
Company valuation basically includes the following steps:
- Investor looks at money to raise
- Investor looks at required rates of return given the investment stage:
- By looking at the required rate of return the investor calculates what he wants his money to be worth in year 'n'
- Then by looking at the projected value of the company from the business plan, the investor calculates what percentage of the shares he then would need.
- Then the share price can be calculated from the # shares and the original required investment.
Session audio: <<AudioFragment /static/files/MBI/Module%2010/M10-S5%20-%20Explaining%20Company%20Valuation.mp3>>
Process explained in /static/files/MBI/Module%2010/Company%20valuation.xlsx spreadsheet (picture below:
Company valuation 'rules of thumb'
| Type of business | Formula |
|---|---|
| Retail | 3 times sales |