Identify and describe the four corporate valuation methods (approaches for determining a business' monetary value)

What will be an ideal response?

(1 ) Net Worth Method: Total Shareholders' Equity (SE) minus (Goodwill + Intangibles) After calculating total Shareholders' Equity (or Owners Equity, if applicable), subtract any amounts for goodwill and intangibles that appear as assets on the firm's balance sheet; (2 ) Net Income Method: Net Income times Five. A conservative rule of thumb is to establish a business's worth as five times the firm's current annual profit. A 5-year average profit level could also be used; (3 ) Price-Earnings Ratio Method: Stock Price divided by EPS) times NI. To use this method, divide the market price of the firm's common stock by the annual earnings per share (EPS) and multiply this number by the firm's average net income for the past five years; (4 ) Outstanding Shares Method: Number of Shares Outstanding times Stock Price To use this method, simply multiply the number of shares outstanding by the market price per share. The value obtained by the Outstanding Shares Method may also be called the market value or market capitalization.