Company Valuation - made simple
See the powerpoint presentation on slideshare here . See www.companydatashop.com for a source of company data. Key Concepts Net Asset Value Net Asset Value: this value of all the assets (cash, stock , equipment) less all the liabilities of a company (unpaid invoices, loans, money due to taxman etc) Break-up Value= Net Asset Value minus the costs of selling all the assets and shutting down the company. This is the minimum value you can attribute to a company Going Concern In most cases it makes no sense to break-up a company and liquidate the assets. A company is worth more if it continues to operate (a "Going Concern") as over time it will probably generate more profits than the Break-up Value. Risk Faced with a choice on investing in a company or investing in government bonds, the investor needs to consider not just the projected returns but also the probabilities of these projections turning out to be true. That is to say the investor needs to eval