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From: | "tennyson@caverock.net.nz" <tennyson@caverock.net.nz> |
Date: | Wed, 17 Jul 2002 23:32:54 +0000 |
Hi Shaun, > > > Can anyone recommend a book that covers assesing companies in > trouble, how to assess their ability/likelihood of trading out of > financial difficulty? Or websites etc.. Or advice.. > > Well, you could start with this website ;-). If it were me, I would be looking at trying to estimate revenues at the high point of the business cycle. Superimpose these revenues on the existing cost structure, calculate a theoretical profit (and using a suitable P/E ratio, a share price) and you might have a good idea of the recovery potential. If you have a profit then you can work out a share price based on a conservatively low P/E of say 6 to 8. The other factor you need to put into the equation is the existing company debt, and need for future capital expenditure. If the company has never made a profit, then any such hypothesising is truly theoretical. If that is the case, then all bets are off. SNOOPY --------------------------------- Message sent by Snoopy e-mail tennyson@caverock.net.nz on Pegasus Mail version 2.55 ---------------------------------- "Dogs have big tongues, so you can bet they don't bite them by accident" ---------------------------------------------------------------------------- To remove yourself from this list, please use the form at http://www.sharechat.co.nz/chat/forum/
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