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Valuation of Company

weshtawake · 2008-10-15 12:27:17

I am wondering if there is a standard or rule of thumb multiple of Turnover used by investors when valuing a manufacturing company?? I have an idea it might be 2 times turnover??

15-10-2008 1:27pm

#1

weshtawake

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I am wondering if there is a standard or rule of thumb multiple of Turnover used by investors when valuing a manufacturing company??
I have an idea it might be 2 times turnover??

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Comments

#2 15-10-2008 1:30pm

Mr. Incognito

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not that simple.

you have to drill down and look at the debts and oblidgations. You could have acompany turning over 20million anually with debts of 100 million which would probably channge hands for a nominal sum- a pound say.

There are a number of formulas for this purposes. I'm sure someone with more accounting knowledge than me can assist.

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#3 15-10-2008 1:31pm

Mr. Presentable

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7 X Net Profit

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#4 16-10-2008 5:25pm

Cyrus

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company valuations can take various forms, but for a company with maintainable earnings it normally comes down to a multiple of EBIT or EBITDA

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