Chapter 6. Valuation
Valuation is no mystery. The trap that people can fall into is thinking that there is a single mathematical route to calculating value and one single, ‘right’, number applicable to a company’s value. There is no single number and no right number. It is an old cliché but the value of a company is the price agreed between a willing buyer and a willing seller. Value, then, can only be worked out in hindsight, which is not much good if you are the person struggling to calculate a price for an indicative offer prior to a deal.
Let us first of all deal with a couple of the myths of valuation and then turn to how to do it in practice.
Valuation is not best left to the experts
Valuation is not difficult if you understand the techniques ...
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