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how company share value measure

2007-02-19 22:03:00 · 4 answers · asked by subir 1 in Business & Finance Other - Business & Finance

4 answers

Divide the person with Share price person

For eg:
185
-----
6

2007-02-19 23:30:10 · answer #1 · answered by Mayur Parekh 2 · 0 0

If you are talking about stock, calculating share price is not that simple. Share prices are not determined by the the companies equity. There are a lot of other calculations that come in to play such as the avg P/E ratios in the industry, how well the company is performing, perceived future value of the company, debt, sales, growth rate and so on. Although one could claim that all of these things comprise of a companies equity, there is no easy pen and paper way to determine what a companies real value is or should be which is why investors have to use different charts and formulas to determine if a stock is priced correctly. And yes as the other person stated your math is wrong.

2016-03-15 22:28:05 · answer #2 · answered by Anonymous · 0 0

What you want to know is not clear! Do you mean, how a company values it's own shares or an investor of a company's shares!

There is no standard or definite way of doing that.If you are asking in an investor's point of view, then there are some points to be considered before purchasing a share:
Basically two things are important, one is P/E or pe ratioi i.e market price to earnigs per share (EPS).Suppose if X shares trade at 500 Rs. and it's EPS is 50 rs, then its' pe is 10.You can know the EPS figure from the quarterly results that companies announce from time to time.

BV or book value which in simple terms is Total assets -total liabilities, is also considered, particularly, for financial services companies.

Another point is growth prospects of a particular company.For ex: tata tele services, is not making any profits as of now, but its improving performance each quarter, along with the tremendous opportunities in the telecom sector are making it an investment worth.

Replacement costs: Oil marketing companies have huge retail outlet network along with valuable real estate across the country.For a new company it will be difficult to replicate them now as the availablitlity of land in prime localities in towns and cities is scarce and expensive.Another example is Tata steel.For any new company which wants to setup a greenfield venture similar to that of Tata steel capacity is very costly.
Another way of valuation is discounted cash flow.

A company having brands with good brand recall will be valued well.

A company having patents and good R&D wil be valued well in the pharma sector.

Ultimately it all boils down to demand and supply of shares, market mood(whether the trend is bullish or bearish),economic prospects of not only our own country but also of international markets.

2007-02-19 22:40:38 · answer #3 · answered by Anonymous · 0 0

The share Price of the Company depends of several factors:
(a) The Promotors
(b) The Product
(c) The share holding of the Promotors
(d) The Financial projection
(e) The fund management - Loans/Deposits etc..
(f) The Book Value of the share (Total nett worth/Total no of Shares)
(g) The Earning Per share Value
(h) The Industry Parameters-
(i) The forecast of erning/Sales etc ...
(j) The track record of the company.
(k) The floating stock of the company.
........

2007-02-19 22:41:56 · answer #4 · answered by AVANISH JI 5 · 0 0

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