What calculation is used to value a business?

February 7, 2010 by admin · 4 Comments
Filed under: Other - Business & Finance 
business
lordsolutions asked:

I am looking at buying a children’s day nursery as a going concern. Is there any way that i can value a business, for example are there any ratios, calculations or magical formulas based on Turnover or Gross or Net Profit, etc.?
I seem to remember that someone once told me that you can value a business at 3 x its current Net Profits.

Related Blogs

Related Blogs

Possibly Related Posts:


Tags: , ,

Comments

4 Responses to “What calculation is used to value a business?”
  1. junglejungle says:
    February 10, 2010 at 2:50 am

    well yep… net profit / gross form previous years would help..

    also the running costs..

    basically it’s projections which can be vague, say if you only had 20 kids attending or double capicity..

    easiest was would be to use a use a spread sheet.. with the best and worse case senario..
    has one junglejungle

  2. Luke W says:
    February 11, 2010 at 7:31 am

    Most investors will use the balance sheet and Profit and loss accounts. Luke W

  3. ardha11iday says:
    February 13, 2010 at 8:12 pm

    I f business is existing then something called “goodwill” is taken into the equation. You really need to know at least 2 years trading figures, rates,rent, utilities costing, staffing, registration fees, clients , turn round of children and ages of attendees, you need C.R.B clearance, and want is the cost of staff, as there is a number of adults to kids,and how many families are nearby whom will use the service. It is not a magic formula but practical information before commitment. ardha11iday

  4. dixianna says:
    February 16, 2010 at 12:03 am

    not sure talk with someone that has that type of business dixianna

Speak Your Mind

Tell us what you're thinking...