Factors to Consider when Valuing a Business

• The nature of the company’s business and its history (milestones, profitability, growth profile)
  
  
• The outlook for the economy, subject industry, and competitive landscape (impacts demand)
  
  
• The financial condition of the company (use of debt)
  
  
• Analyze the past and future earnings capacity of the company
  – Investing is forward looking, use history to help understand the future
  
  
• Prior transactions involving the company’s stock (indication of value)
  
  
• The ability of the company to distribute earnings (dividends)