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Estimating the net worth of your company

Josh_10 Member Posts: 787
Has anyone had to estimate the net worth of your company? We are aquiring a failing electical contractor and we are going to offer the "talent" stock in our company as payment.

Thanks in advance.


  • Ken_40
    Ken_40 Member Posts: 1,320
    Since they are failing company...

    Simply take the tangible assets (depreciated cars, trucks, and tools at present blue-book value, any property they may own - less mortgage(s) outstanding on same, 50% of whatever inventory is owned; subtract all the debt due at full face value and half to three questers of the A/R less all taxes due etc. and you should come up with a decent number of "worth."

    A business in "failed decline" mode has no value for "good will." In fact, the good will may be a negative!

    Tread with extreme caution. A failed coin operated laudromat is as good a match as an electrical contractor. Kindred trade? Look again.
  • Josh_10
    Josh_10 Member Posts: 787

    Thanks Ken, Actually it is the net worth of our company that I am after. See the electricians are talented, just not good business men. We already know how much we are aquiring their company for. Basically we are just buying their tools, and 1 truck.

    So I need to give 1 guy some stock in our company as payment. Very little percentage of company but I am finding it hard to put a value on our business. Our CPA hasn't been much help.
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