How to value a business

Valuing shares in a business usually focus on estimating the equity in the whole business as a whole by focusing on tried and tested accounting techniques. It is fair to say that the techniques be it based on a market multiple or net asset approach is more of an art rather than a science.

Any valuation must contain various assumptions and estimates and it is therefore useful to consider them all. In particular the four techniques are generally considered to be as follows

1. Market multiple.

2. Net Asset approach.

3. The discounted cash flow approach and finally…

4. The dividend yield.Â

We shall look at these in more detail as the weeks go on, in the meantime feel free to contact me at michael.coyle@lawdit.co.uk

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