We have a privately owned company. We are about to take on a new Director and wish to give him a % stake in the company in the form of a shareholding. We are unsure as to what % of the company is warranted. To assist us in this, we feel that we need to find the current approximate value of the company. On-line searches are giving various options for calculation and I am unsure which route to go?
The company is profitable and has assets. Is it as simple as Value = Assets + multiple of annual profits (or multiple of projected annual profits). Is this too simple? I understand the sentiment that value is what one is willing to pay, but we need something tangible here. Help much appreciated.
The company is profitable and has assets. Is it as simple as Value = Assets + multiple of annual profits (or multiple of projected annual profits). Is this too simple? I understand the sentiment that value is what one is willing to pay, but we need something tangible here. Help much appreciated.