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From: Derrick Barden


I've got a friend who's looking to purchase a business by tender. They've sent all the financial information and looks pretty good. Though, he's taking it to his accountant to get a professional view. I guess what I was wondering is how do you work out a fair price for the business?

Would you value each individual asset eg, land value, infrastructure, business name etc. or would you use the cashflow for calculating a NPV? Any feedback would be great!

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Reply: 1
From: Rixter ®

Usually approximately 2.5 times annual turnover including plant, will put you in the ball park.


Happy Investing,
Rixter :)
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