ENTREPRENEURSHIP

Detailed explanation-1: -Add up the value of everything the business owns, including all equipment and inventory. Subtract any debts or liabilities. The value of the business’s balance sheet is at least a starting point for determining the business’s worth.

Detailed explanation-2: -Valuation of a Company by Stock Price When the shares of a company are already publicly-held, the easiest way to calculate its market value is to multiply the number of shares outstanding by the current price at which the shares sell on the applicable stock exchange.

Detailed explanation-3: -Three main types of valuation methods are commonly used for establishing the economic value of businesses: market, cost, and income; each method has advantages and drawbacks.

Detailed explanation-4: -When valuing a business, you can use this equation: Value = Earnings after tax × P/E ratio. Once you’ve decided on the appropriate P/E ratio to use, you multiply the business’s most recent profits after tax by this figure.