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Aspiring Lawyers - Interviews & Vacation Schemes
Commercial Awareness Discussion
Valuation of a company
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<blockquote data-quote="J Wu" data-source="post: 7910" data-attributes="member: 544"><p>In terms of valuing a company, the most common methods I see are discounted cash flow analysis, precedent transactions analysis or comparable companies analysis.</p><p></p><p>I’ve never really heard of using a balance sheet to value a company. I’m curious, have you heard of someone being asked this before?</p><p></p><p>I would subtract the liabilities and stockholders equity (or just look at the sum of assets because balancing a balance sheet requires the liabilities and equity to equal the assets anyway). This would be essentially saying a company is worth the value of its assets.</p></blockquote><p></p>
[QUOTE="J Wu, post: 7910, member: 544"] In terms of valuing a company, the most common methods I see are discounted cash flow analysis, precedent transactions analysis or comparable companies analysis. I’ve never really heard of using a balance sheet to value a company. I’m curious, have you heard of someone being asked this before? I would subtract the liabilities and stockholders equity (or just look at the sum of assets because balancing a balance sheet requires the liabilities and equity to equal the assets anyway). This would be essentially saying a company is worth the value of its assets. [/QUOTE]
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