What is valuing equity? This post will take a small dive into the common ways to calculate the equity value of a Company, focusing on private businesses. Valuing Equity Definition To keep it simple, valuing equity is the ownership interest in a business after subtracting the financial obligations (e.g debt) / debtholder ownership. Company Value […]
Almost always when the discussion of business valuations arise, the terms of EBITDA or EBIT and PEBITDA or PEBIT are part of the discussion…. But what do they mean? And when do you use one instead of the other? Or do they both simply arrive at the same conclusion when finding a valuation figure? If […]
Technology Technology is an important tool that can improve a company’s performance and competitiveness. Some companies lack the resources to update technology and therefore find it difficult to keep up with the technological changes in their markets. On the other hand, other companies manage to keep pace and are aware of changes to their market […]
It is fast… but how reliable is a business calculator? There are pros and cons to using a business calculation software, with some situations more viable than others. If you’re contemplating using a business calculator, we encourage you to read this article to answer some of the questions you should be asking. What is a […]
Cost of Equity The cost of equity is the rate of return an investor expects to receive as compensation for the risk associated with owning the stock or shares of a company. In comparison with the cost of debt where interest payments and repayment of principal are defined in contract, the cost of equity does […]
Copyright is a legal term that refers to the exclusive right that an individual or corporation has over original works of authorship. (meaning they can take legal action against someone who uses the copyrighted asset for commercial purposes). Types of copyrights: Between the most common copyrights we can find music, paintings, and books, but artistic […]
Michael Jackson’s likeness and image were under trial to determine its value and the tax impact it would have on his heirs. After years of trial disputes, the judge decided that the IRS valuation was heavily overpriced due to misappreciations and instead sided closer to the estate’s expert valuation at $4.125 million vs. a $161 […]
Net Working Capital (NWC) are all those short-term financial resources that your company needs to be able to continue day-to-day operations efficiency (resources to fund or support your operation), and thus avoid delays or disruptions. NWC consists of various current assets such as inventory, accounts receivable and cash and some current liabilities such as account payable. […]
When performing a business valuation, several discounts should be considered that may need to be applied to a business’s value. Below we will explain what a discount for lack of control means and when an investor, valuer, or other users of valuation information, should be aware of it. DLOC Valuation The DLOC is a discount […]
A business Fair market value (FMV) or market value is commonly used in business valuations and is defined by the ATO as: “the price that would be negotiated in an open and unrestricted market between a knowledgeable, willing but not anxious buyer and a knowledgeable, willing but not anxious seller acting at arm’s length.” If you have asked […]
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