How to evaluate a business value: Read some of its methods

 How to evaluate a business value: Read some of its methods


How to evaluate a business value? Violation means removing the work done by the company. When I go to buy something in the market, I find out which things are available in the market and which are cheap and how do you find out. You compare the value of that thing with its price and with the help of it you find out whether the cumbersome is getting expensive or cheap.

 How to Calculate the Value of a Business for Sale

 If you are offering a higher price for something and you are getting a lower value in return, then it means that the side it is valid and when you are offering a lower price for something and you are getting a higher value in return  If it is found then it means that that thing is the underworld.

 If the reach of a share is going one-sided, then the value of that share doesn't need to be very high, the value of that share can be very high or it can be more or less.

 How to calculate business value

 So when a stock is trading at a price higher than its value, then it is called an undervalued stock and when a stock is trading at a price less than its value, it is called an undervalued stock. you try to remove  You don't see price in valuation. In valuation, you try to get the actual of the festival.

 Understand by example

 Mr Benjamin Graham says that while taking out the solution of any company, it is not necessary that you have to take one of its interventions and the examples tell that you do not have to know the exit weight of a person. All you have to do is to find out whether that man is lean, thin, okay or fat.

 The main advantage of investing in the stock market is that people decide the price of the stock in the stock market and many times people make a mistake in finding the value again due to the flow of motion or for some other reason, due to which many times  The difference between the stock's fair value and the share price is huge and investors can take advantage of these mistakes made by people.

 Error in getting a valuation

 A lot of people don't take out the pollution while doing the valuation, they do the pricing, they see how much price people are paying for other companies like the company in which they want to destroy and then by comparing it they find out which company  What should be the price of destroying them?

 So here they are not doing valuation but pricing, so you have to always keep this thing in mind that while taking out Bhushan, now take out the elevation only.  By analyzing the company and not the pricing, understanding its business and seeing all its aspects, you can now calculate the valuation of the company.

Evaluation of the Company Formula

How do you do company valuations? If you want to earn money by investing in the stock market, then you should come to the valuation of the company. If and only if you know how to do company valuation yourself, you can be successful in buying and selling shares at the right price. Valuation is not rocket science nor do you need any CA and MBA degree. It is very easy so let's understand.

 How to calculate business value

 Suppose you have a business selling tea.  I want to buy this business from you. The value of your shop is 5 lakh rupees. The shop has some furniture and equipment.  If its value is one lakh rupees, then the total value of your asset becomes 6 lakh rupees.  What will you do if I give you 7 lakh rupees to buy your tea business from you? I am giving 7 lakh rupees in front of your leak cassette, so maybe you can sell this business to me too.

 But suppose this tea business of yours is giving you a profit of 10 lakh rupees annually after taking out all the expenses, then what will you do now? Will you sell this business of yours to me only for 7 lakh rupees? If you do this then you will lose Rs 10 lakh every year for your lifetime. If I want to persuade you for this deal, then I have to pay you so much money that you can earn 10 lakh rupees as interest every year by keeping a fixed deposit in the bank, then let's say.

 Bank fixed deposit

 If the bank is giving 3 person interest annually, then I should give you one crore rupees for this deal, by which you can earn 10 lakh rupees every year according to the teen person interest by making a fixed deposit. In this example, we saw that the total value of the tea stall was Rs.6 lakhs.  Using this Rs 6 lakh asset, the business was generating a profit of Rs 10 lakh annually.  Suppose in future someone else starts a tea shop in the neighbourhood of this tea shop and due to this competition, the profit gets reduced to half.

 Understand by example

 Suppose profit slips from 10 lakhs to 5 lakhs, then now because of slipping profits, for the business for which I was ready to give one crore earlier, now I will give only 50 lakhs. If profits are likely to drop further in the future, I will lower my price further and if profits are likely to increase, I will increase my upper price. The valuation of any business or company is always dependent on its earnings.  Earning means profit.

 Even in the stock market, the prices of shares go up and down due to this earning.  Friends, the share prices are the slave of the company's earnings, so before buying the shares, we should see how much profit the company is making and the enterprise value of the company.

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