extract:
Much has been written on the subject of how to properly establish the value of a company. And most of that is only helpful if you need to pass an economics exam. Practical applicability: forget it, zip, nada, none.
So, we will set out to dissect the problem in our usual “primitive” business survival way.
This will undoubtedly drive those practioners of economics up the wall who believe that complexity is preferable to practicability – probably because the more complex the formulas are, the less likely they are to be contradicted.
But let’s leave academic vanities behind and concentrate on the essentials. We can distinguish three completely different approaches to company valuation:
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