The concept of stock evaluation only appears in joint stock companies. In fact, the stock evaluation is evaluation of joint stock companies, determining the market value of companies – operating in the form of a joint stock company – with the capitals divided into equal shares.
Currently, there are many different methods have been applied in stock evaluation such as P/E method; DCF discounted cash flow method, adjusted asset method.
The choice of which method depends much on:
– The reliability of past financial data and estimation of forward cash flow of companies
– The risks level in companies’ operation includes factors as the market situation and the company’s prospects (this will greatly affect company’s operation time, discounted ratio in DCF calculation formula).
– Factors related to intangible assets of the enterprises such as management knowledge of the Board of directors, product reputation, trade marks, product quality…
For Startups, in the beginning period, new operations, stocks evaluation have to be considered carefully. Before the investors concern on the stocks’ price which Startups offered, they will analyze and consider carefully the business strategy, customer relations, marketing strategy and the ability to gain profits in the short term from 1 to 3 years…
EDUBELIFE, with team of rich experience experts always try to give synchronous solutions, especially for small and medium enterprises, unprofessional operation, financial informations have not really be professional, the ability to control financial risks is low… Not stopping in stock evaluation, EDUBELIFE firstly focuses on improving the quality of financial administration, accounting system – where provide financial data for analyzing and evaluating stocks.
In our opinion, there is not a good evaluation result for a business with poor business and financial administration skills.