i would say look to see if there are any similar business that are trading publicly.
example here: jack in the box:
find the p/e, this is the market value of the company divided by the earnings. in the case of jbx, it’s 12.03. multiply this number by the earnings of your company, so if you make $1 million per year, the value would be about $12 million. of course JBX is just a sample, you’d need to look at lots of restaurants and find the ones that are the most similar to yours, probably in the area of growth potential and margins.
also a word of note, is that when competitors want to buy out a company, they often pay more then current market value in order to entice the owners into selling, but when the owners want to sell the company, they often sell for less.
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i would say look to see if there are any similar business that are trading publicly.
example here: jack in the box:
find the p/e, this is the market value of the company divided by the earnings. in the case of jbx, it’s 12.03. multiply this number by the earnings of your company, so if you make $1 million per year, the value would be about $12 million. of course JBX is just a sample, you’d need to look at lots of restaurants and find the ones that are the most similar to yours, probably in the area of growth potential and margins.
also a word of note, is that when competitors want to buy out a company, they often pay more then current market value in order to entice the owners into selling, but when the owners want to sell the company, they often sell for less.