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They are going to lay off 65% of their workforce after the first of the year.
Additional Details
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 Do you think Microsoft is or was a monopoly? |
Should it be stopped?
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http://news.yahoo.com/s/
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Albert S | Is there a tried and true method of determining the value of a corporation at any given time.? |
I am a stockholder in a closely held private corporation. What method is typically used to determine the share value at a given time. Do you simply use the balance sheet at a point in time to determine the total stockholder equity? Also, Is there a way to consider future potential earnings in the determination of the value?
Additional Details
Thanks for everyone's response, but I want to clarify that this is a closely held private corporation. There is no market for it's shares, so the price won't be determined by market forces. We are trying to come up with a formula for corporate share buy-back and retained stock issuance. |
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(Ω)Mistress Bekki
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Yes, it's called the "share price". It's determined by a collective genius we call the "market". Yes, assets and liabilities, and P/E ratio, and growth potential and all that are factored in. You can't just reduce it to math. |
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Empanada
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There is no absolute tried and true method and if you pick any two financial analysts, they'll give you two different numbers. But there are a couple of ballpark methods: Just multiply profits by 7 or gross sales by 3 for the rough total value of the company. There is no accurate method to predict the future earnings of a company, but if it has consistent past earnings, those can be extrapolated for a reasonable estimate (which undoubtedly includes some risk). Those future earnings can be discounted to determine a present value.
Essentially, a private company's shareholder equity is difficult to estimate because its shares are not freely traded and therefore liquidation requires some effort (i.e. you have to go out and try to sell the company rather than execute a trade).
Note that if this is a startup without any substantial earnings history, any future estimates of earnings will be entirely speculative. Essentially, it's your best guess. |
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Elizabeth Dreams
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the value of any kind of share, is what someone is prepared to pay you for them. |
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rie_m7
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I'm sitting in Business Associations in law school right now.. haha, I should know this.. |
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howie r
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yes there are many ways to calculate the value of a company either private or public. go to any financial website and see how its done. |
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alexandriaferrari1
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You might want to take a look at the companies price to earnings ratio. All tangible assets, quarterly earnings, and longevity.
Stock values as well as anticipated earnings for the fiscal year ahead and what are the companies competitor's..will they be able to be a player in the global market. |
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Peter T
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Net "net assets" divided by shares outstanding. Sounds simple but actually involves a lot of accounting. Balance sheet valuation does not allow for the present cash-out value of items that have an actual fair market sales price. The balance sheet includes depreciated items but does not address the residual value that may be far in excess of depreciated value. There are other obstacles to just using the balance sheet.
The techniques are used by "value" investors looking to evaluate publicly held companies and are generally more encompassing. A value investor tries to determine the actual worth of a company and then divides the worth by shares outstanding to determine the fair market price of the stock. When I buy shares on a value basis the company is selling stock to me based on my determination of its value and the resulting price that I have determined to be acceptable.
Net assets should be net "net" assets and includes items being depreciated revalued at their present fair market value.
Book suggestion - "Value Investing for Dummies" ISBN 0-7645-5410-7, $ 21.99
This will make the concepts and process flow clearer.
Potential future earnings are a matter of educated opinion between the buyer and the seller. There are some means of determining the probable maxima and minima of the range of future earnings |
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