Quote:
Originally Posted by Kiroy  So is there a difference in what your company is worth and how much can you sell it for?
I think that's the problem - ya, we can say your company is worth 2 million (liquid), but if your earning 5 million a year you could sell your company for many millions of dollars - so is it worth 2 million, or many millions.
The argument confuses me a bit. |
Oh absolutely it can be confusing and convoluted, and that's the crux of this argument. Cynno originally argued companies should only be valued at what they could be liquidated for (which is incredibly fucking retarded in an information economy), now he seems to be backtracking.
For the example I was using, it's even more convoluted since it is a privately owned business and the company isn't worth all that much should the current management walk away, because most of the work we do is largely based on past relationships and experience, and without that management in place the company is nothing more than 80 plumbers and a bunch of tools and equipment.
But for tax purposes and that sort of thing, when I bought in we had to pay KPMG to do a valuation of the company (far too much money to basically spend 5 minutes reviewing financial statements and doing some basic arithmetic), because it would be tax evasion for my dad to just hand over his share of the company without being paid a reasonably fair market price for it and paying capital gains.
As I said though, I'm a fucking neophyte at this shit and really need to take some basic business and accounting courses. We're a fairly large company essentially being run by plumbers. Smart plumbers sure, but most of the balance and profit/loss reports our inhouse accountant emails me are greek, I just look at the bottom line and decide how much hookers and blow I can afford this weekend. It's over 9000!
