you've killed it.. Those who are raking their brains out must take a look at this to allay their nerves... Thank u so much for clearing up such a swinging concept
Thanks for posting. This is very helpful and fun to watch. What program did you use to create the graphics? I make videos for RUclips and I think this style of animation is great.
So, say you're just starting out, in the acquisition phase, using private capital but haven't started selling a product, how do you value a single Stock?
Many ways, one way would be the book value to see the value of the business or company, then divide by number of shares. (Assets - liabilities) / Number of shares
that was actually make a lot of sense thank you so much Now i understand why net adjusted asset valuation method was like selling the store for 20 dollars and market approuch was more like the valuation of the $1000 business earning... idk if am right but have a bit more idea about it after finish business valuation class
Hey i found your vid extremely cool because A) it was short B) because it was very general. But here is one question. If according to your concept then why would or should person buy a business instead of putting their money in bank?
This is just a theory and there are many other factors to consider in buying a business. One example is income growth, and a lot of others. By the way, a lot of business founders *do* cash out and sell their business (in the startup industry it's called "to exit") at 10X earnings (or even higher valuation) and then put their new stash of cash in the bank or other more conventional investments (mutual funds, etc.) and then just enjoy the retirement or early retirement.
hi, thanks for this pretty simple explanation. I have 3 year forecast for my start-up which will I take investment soon, should I look for revenue, cash flow or profit? should I consider each year or at the end of third year?
Depends on the objective of your investors. If they're long term investors they'll probably want good real cash flow, if they're the VC type you might be surprised some of them do NOT want a company to have cashflow or profit; so that they can make others believe in the "crazy profit potential in the future" and that it's "focused on growth" right now ("it will be the next Facebook!") and then they can sell their shares at a super high price based on this imagination.
If I'm the investor, I would rather place my $1000 in the bank rather than buying that lemonade stand. Business is riskier and my 10% return a year is not guaranteed. Where in the bank it's much safer. So you're just giving me the risk over the security? I think we need to renegotiate?
I HAVE NEVER SEEN ANY VIDEO MADE SO EASY TO UNDERSTAND. THIS IS NOT BULL SHIT THIS IS SHIT FOR BULLS. BULLS - THE ONES WHO ARE READY TO GIVE IT A GO AT A TARGET. SHIT - SIMPLIFIED KNOWLEDGE GIVEN FAST ASKING A BULL TO DO AN MBA BEFORE GOING FOR A TARGET IS THE BULL SHIT WHICH IS HAPPENING IN THIS WORLD. BUT WE DON'T GET THIS. THAT MAKES THIS VIDEO AN ASSET FOR REAL. THANK YOU SO MUCH.
Hi, here we're talking of a company and not bank, and we assume it survives and continues, with this average earnings. In your case, check out my other video "How to Value a Bond" which has returns only temporarily.
What about people with a 100 million in annual revenue...how much would the buyer pay...for the bank to give me 100 milliondollars in interest annually
Correct, if the bank return is better than the business' return. The video is a hypothetical scenario where business return is higher. The returns from both bank and interest fluctuate in real life, changing the company valuation or business valuation
Yeah... Just what about the person making the lemonade? It is not an mechanical automate. This is not included in the valuation. If this is a paid worker then it is definitely profitable to sell it for 21.
Best 3 minutes I have ever spent from my life.
Honored to have been part of your 3 minutes!
you've killed it.. Those who are raking their brains out must take a look at this to allay their nerves...
Thank u so much for clearing up such a swinging concept
what bank are you I could use that 10% interest rate
Thank you very simple to understand
Just one question why not also add the assets on the final value so the project earnings of $1000 + $20 assets
lemonade stand story. CLASSIC.
I wanna take the daddy buffet route and only own one stock. So, I feel business fundamentals are my most important aspect for investing.
Why is choosen 10 year - In case of chose 20 years the valuation would be 2000$, so is there any rule or standar to use 10 year
Lemonade stand is active income and requires work, while the passive income doesn't require work.
If you watched carefully an angel came down and gave a magic machine ;)
Thanks for posting. This is very helpful and fun to watch. What program did you use to create the graphics? I make videos for RUclips and I think this style of animation is great.
GREAT content. This is so easy to follow, and the animation makes it easy to watch and retain attention. Nice work MBAbullshit!
Glad you liked it!
Mind has been blown. super simplified, yet explained profoundly this fundamental concept...Thank You buddy
Glad to hear that!
unfortunately the almost free cost of money (and no interest on savings) will pretty much overprice any business today.
I understood the concept explained by this video faster than reading the book.
Glad you understood it fast!
10 years from now, this 3 min vid will still be on top for "Company valuvation" keyword.
I hope so too, thanks for watching this company valuation or how to value a business video
Best video no cap 🧢
Best comment for the day!
So, say you're just starting out, in the acquisition phase, using private capital but haven't started selling a product, how do you value a single Stock?
Many ways, one way would be the book value to see the value of the business or company, then divide by number of shares. (Assets - liabilities) / Number of shares
Cheaper to buy the assets and do it yourself
Quick question 🤔 regarding business valuations. Is there a way to use a business valuation to get a loan??
Yes, such as if the bank will accept your company's equity as collateral. But this is risky
that was actually make a lot of sense thank you so much Now i understand why net adjusted asset valuation method was like selling the store for 20 dollars and market approuch was more like the valuation of the $1000 business earning... idk if am right but have a bit more idea about it after finish business valuation class
Bro you earned a subscriber straight away....thanks a lot❤
Glad to have you!
Hey i found your vid extremely cool because A) it was short B) because it was very general. But here is one question. If according to your concept then why would or should person buy a business instead of putting their money in bank?
This is just a theory and there are many other factors to consider in buying a business. One example is income growth, and a lot of others. By the way, a lot of business founders *do* cash out and sell their business (in the startup industry it's called "to exit") at 10X earnings (or even higher valuation) and then put their new stash of cash in the bank or other more conventional investments (mutual funds, etc.) and then just enjoy the retirement or early retirement.
MBAbullshitDotCom what do you think of making a video about this topic that we are talking about?
hi, thanks for this pretty simple explanation. I have 3 year forecast for my start-up which will I take investment soon, should I look for revenue, cash flow or profit? should I consider each year or at the end of third year?
Depends on the objective of your investors. If they're long term investors they'll probably want good real cash flow, if they're the VC type you might be surprised some of them do NOT want a company to have cashflow or profit; so that they can make others believe in the "crazy profit potential in the future" and that it's "focused on growth" right now ("it will be the next Facebook!") and then they can sell their shares at a super high price based on this imagination.
Short and Sweet Explaination with effectiveness. 👍🏼
Glad it helped on how to value a company valuation or how to value a business using this theory
amazing explanation...
If I'm the investor, I would rather place my $1000 in the bank rather than buying that lemonade stand. Business is riskier and my 10% return a year is not guaranteed. Where in the bank it's much safer. So you're just giving me the risk over the security? I think we need to renegotiate?
Watch my video on CAPM which takes into account risk and how it will increase "expected return" above what the bank offers
very simple and useful . thanks
You are welcome
Great presentation.
Excellent Video Thank You
glad you find it excellent!
🌹 one of the best Explainations.
Glad it was helpful!
I HAVE NEVER SEEN ANY VIDEO MADE SO EASY TO UNDERSTAND.
THIS IS NOT BULL SHIT
THIS IS SHIT FOR BULLS.
BULLS - THE ONES WHO ARE READY TO GIVE IT A GO AT A TARGET.
SHIT - SIMPLIFIED KNOWLEDGE GIVEN FAST
ASKING A BULL TO DO AN MBA BEFORE GOING FOR A TARGET IS THE BULL SHIT WHICH IS HAPPENING IN THIS WORLD.
BUT WE DON'T GET THIS.
THAT MAKES THIS VIDEO AN ASSET FOR REAL.
THANK YOU SO MUCH.
Glad you found it easy!
but the bank will only pay you %10 temporarily you will receive %10 for 3 or 4 years !! does the period matter in here?
Hi, here we're talking of a company and not bank, and we assume it survives and continues, with this average earnings. In your case, check out my other video "How to Value a Bond" which has returns only temporarily.
God bless you for this. Thank God I now know how much I’m giving off of my company’s worth
Note this is only the company worth when using this specific model based on cash flow
Clear explained.. Thank you
Happy you find it clear!
Great Video!
Múcio Batista great thank you!
Nice Explanation!!
+Dheeraj Rajput Nice, thanks!
Recently apple turn to a 1 trillion dollar company and which means apple is generating a revenue of 1trillion $ as u say ....
I am confused pls help
These videos ARE AMAZING! Thank you!!!!
Glad you find them amazing!
Great Video, I have only a quick question, aren't you supposed to add the value of the assets? Isn't the value of that company $1020?
When using this specific valuation model, no.
Super explanation bro
Thank you so much 🙂
I gotta rewatch this video
Watch our how to value a business or company video as many times as you want
Super explanation.
Glad it was helpful in how to value a company with this theory!
thank you so much
Welcome!
Wow. That was brilliant.
+Ahamed Jameel Wow. Thanks.
This is explained so well
Glad you like the explanation!
you are a legend
thanks man!
Bit of time has passed since you made the video, but thank you!!
Glad it helped!
That was so helpful. Thank you 🙏🏼
Glad it was helpful!
Thanks alot
Welcome!
What about the salary? What if the salary is 50 bucks a year? Do you minus the expenses?
Yes, minus expenses. Free cash flow is net of expenses (or more accurately net of "cash outflows")
Thank You! This deserves more Recognition!
brief and succinct.
Glad you like the brevity of it!
what's name this software plz tell me...
So the person buying the company will take 10 years to make his money back? Time is money, doesn't sound like a good investment.
Maybe true, but this is just an example to calculate based on the video's "givens"
doesn’t include growth of the company, usually people buy companies they can scale profits, and hence increase the value of the business
What about people with a 100 million in annual revenue...how much would the buyer pay...for the bank to give me 100 milliondollars in interest annually
But wouldnt the buyer rather put that money in the bank to make the same money instead of working? What am i missing?
Correct, if the bank return is better than the business' return. The video is a hypothetical scenario where business return is higher. The returns from both bank and interest fluctuate in real life, changing the company valuation or business valuation
why it has to be lemonade stand always..
Net worth?
what happens if its a loss making business? :)
Using this theory, it would be zero value business. But in reality, it could be worth the "salvage value" of all assets sold, minus all liabilities.
dmn, that was super clear.
Glad to be of clarity of this particular company valuation model
Yeah... Just what about the person making the lemonade? It is not an mechanical automate. This is not included in the valuation. If this is a paid worker then it is definitely profitable to sell it for 21.
It is, if you watch carefully an angel came down and gave a magic machine ;)
Nice example ,same happen in real life ??
Haha, good video, better name.
glad you like my name!
Nailed it ❤
Super dooper
Sooper thanks
No combination of 26 alphabets can define ur knowledge....
LOL thanks!
😎
Thanks for nothing. Where is part 2 to this video??
Click on my username and it's there. You're welcome for something ;)