Hershey Posted September 14, 2015 Share Posted September 14, 2015 I am interested in learning about valuation of small (<$40m in sales) of construction subcontracting companies. Target company has current asset equity in business beyond working capital needs. Does a fair valuation of the target company include a multiple of earnings, plus equity in business, or only multiple of earnings? My thought is that the business is worth a multiple of future earnings, plus current equity not needed for ongoing functioning of business. Does this make sense? Merely paying a multiple of earnings could in essence be a purchase only slightly above existing book. Hopefully, I wrote this question in a way that is clear. Thanks, Link to comment Share on other sites More sharing options...
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