Chapter 7
Valuation
Introduction
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 ...
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