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UK General Cleaning Forum => General Cleaning Forum => Topic started by: petra on January 30, 2004, 06:34:19 pm

Title: Help-Company financial Value
Post by: petra on January 30, 2004, 06:34:19 pm

Ok, how do I find out what a Company is worth finanicaly..
Hope you clever guys and girls can help me.
Petra
Ps It is a cleaning company

Title: Re: Help-Company financial Value
Post by: Scots_cleaner on January 30, 2004, 06:47:36 pm

Hi petra it all depends on the turnover you work it out from that .
Your accountant should be able to tell you that!

Title: Re: Help-Company financial Value
Post by: Mike_Boxall on January 30, 2004, 06:47:39 pm

Hi Petra

Companies house is the first place to start if it's a Ltd company. The only problem is that the accounts can be up to 19months old and if there's a group structure sometimes it can be misleading.

Is it a Limited Company you're looking at? Do you have the Company registration number to hand? If so, send me a message and I'll check it for you.

Regards

Mike

Title: Re: Help-Company financial Value
Post by: petra on January 30, 2004, 06:52:20 pm

No it's not ltd, it is a sole trader selling wanting to sell all stock and contracts, I know that the contracts are good and established and that unless on of the customers went bankrupt they are safe.
Petra

Title: Re: Help-Company financial Value
Post by: Mike_Boxall on January 30, 2004, 06:52:45 pm

Quote

Hi petra it all depends on the turnover you work it out from that .
Your accountant should be able to tell you that!

Net profit is a better indication. Most larger businesses would look to pay 5 x 1 years net profit but there are lots of other factors to take into account (stock, directors / proprietors salaries etc) but I do agree that you need an accountant to look through the full accounts.

Do you have a copy of the accounts?

Title: Re: Help-Company financial Value
Post by: petra on January 30, 2004, 06:54:07 pm

thanks Mike

Title: Re: Help-Company financial Value
Post by: Fox on January 30, 2004, 06:56:02 pm

Hi Petra

There are many ways to value a company but one of the simple methods I use is 30p in every £1.  However this will only give you a ballpark figure.  With cleaning companies alot of factors come into play such as what type of contracts are run, the % profit, whether you are buying as a whole or just the good will, liabilities etc.

At the end of the day any company is only worth what someone is willing to pay for it!

Regards
Fox

Title: Re: Help-Company financial Value
Post by: Scots_cleaner on January 30, 2004, 06:57:58 pm

If its a sole trader offer 3 times his monthly turnover!

Title: Re: Help-Company financial Value
Post by: petra on January 30, 2004, 06:59:39 pm

cheer fox, All Im would be buying is paid for stock, equiptment and contracts, they are keeping all liablities.
Petra
The turn over is approx £39K per year

Title: Re: Help-Company financial Value
Post by: Mike_Boxall on January 30, 2004, 07:05:15 pm

Quote

but one of the simple methods I use is 30p in every £1

Hi Fox

Do you mean 30p for £1 of turnover?

It is very difficult to generalise but I would certainly base any offer on profit rather than turnover.

Regards

Mike

Title: Re: Help-Company financial Value
Post by: Fox on January 30, 2004, 07:12:16 pm

Hi Mike

Yes I do mean that - it is very generalised however it gives an indication whether the asking price is in the right region (with lots of leeway granted)

I agree on the best way to price is profit but if you have a list of Companies infront of you that are selling, are you going to go to the trouble of checking everyones books?  

I have sent Petra a pm suggesting she take all figures to bank and accountant to get them looked over.  This is always a must when seriously thinking of buying.

Regards
Fox