The value of a company under the price / earnings valuation method is based on the assumption that the enterprise value should be similar companies whose shares are traded based on the exchange. The company is the value of the future profits of the company and the industry average P / E or P calculated / earnings ratio of other companies with similar business profile.
The formula:
Company Value = [Profit in year i] * [Comparative P / E]/ (1 + r)
Business Valuation - Price / Earnings Method
Where:
Profit in year i = Net income chosen in each year (I)
Comparative P / E = P / E of public companies or industry averages
r = Discount Rate
This value is discounted to the beginning of the forecast period.
Steps:
Step 1
Enter the PE-factor - the average PE of the PE of the industry or a similar company. If the PE is not available or is so high becauseseasonal high growth rates in the stock market, it is advisable to use a PE of 7-12.
Step 2
Enter the discount rate. This sentence is in the free risk interest rate on the market (eg government bonds) is based with a market risk premium, so much as the risk that is involved in the economy, or as much as the uncertainty in the company to grow, its products and their markets.
Step 3
Profile of the company's value, as they changed during the planPeriod.
Note:
This article is one of four articles on the valuation of companies commonly used methods. You can get more information by reading the additional articles about: Free Cash Flow Business Valuation Method, salvage business valuation and EVA Analysis Business Valuation Method.
0 ความคิดเห็น: