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Retail Business Valuation

Spike78 · 2014-05-19 12:44:51

Hi all, My wife and I are considering purchasing a small retail business which I know is for sale. As the business is being sold along with the premises, which is freehold, the valuation will be a mix of assets, future earnings based on past profits and good will; but how are these combined to give the valuation? I have…

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19-05-2014 1:44pm

#1

Spike78

Registered Users Posts: 25 ✭

Join Date: September 2012

Posts: 21

Hi all,

My wife and I are considering purchasing a small retail business which I know is for sale.

As the business is being sold along with the premises, which is freehold, the valuation will be a mix of assets, future earnings based on past profits and good will; but how are these combined to give the valuation?

I have read that the future earnings are valued through capitalisation of earnings, how is this calculated?

Any help would be most appreciated.

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#2 19-05-2014 1:56pm
Graham

Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭

Join Date: November 2001

Posts: 16663

There's some great comments on valuing a business in this thread:

http://www.boards.ie/vbulletin/showthread.php?t=2057193101

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#3 19-05-2014 2:26pm
Peterdalkey

Closed Accounts Posts: 2,091 ✭✭✭

Join Date: January 2012

Posts: 1977

I would recommend that you pay particular attention to post#45 by SeanSouth.

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#4 19-05-2014 7:11pm
Spike78

Registered Users Posts: 25 ✭

Join Date: September 2012

Posts: 21

Thank you both, apologies I didnt see the other thread. Thats exactly what I am looking for.

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