Basic Rules for Valuation from Tim Berry

Not sure how many of you are planning on raising money from investors, but Tim Berry offers 10 basic rules for valuation. It may seem simple, but definitely worth a look. Here is #7:

Analysts often apply formulas. The most common formula is called “times profits” because it multiplies profits times some number. Another common formula is “times sales.” Companies might be worth two times sales or 10 times profits. There’s also book value, which is assets less liabilities. And there’s the estimated sale value of assets.

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