By Adrian Ward, director, AMS Business Sales
The question of how to value a business is one which pops up frequently on Accountingweb. In truth, a business is only worth what someone will pay for it. The price paid on the day of sale is the only time that a company value is not a matter of opinion or conjecture.
It is useful to meet two or three experienced accountants, professional advisors and brokers to guide you on the value of the company. It is at this point a decision must be made on whether to use an intermediary to sell the company or to go it alone.
Methods of valuation
There are a number of methods of valuing a company. The following are most common:
1. Multiples of adjusted sustainable profit
This method uses the technique of applying an appropriate multiple to the sust...