A friend of mine was once asked how much his house was worth at dinner. He said “I guess whatever someone will pay for it.” I was pretty young at the time and don’t think I fully appreciated the wisdom of the comment. These days, I get a report from Zillow once a week that shows me how much they think my house is worth. And they’re pretty close to what I see houses in the neighborhood good for. But ultimately, the house is worth what someone would be willing to pay to buy it. If sold, I would walk away with the sale price of the asset (the house) minus any liabilities (the mortgage).
In this article on the Bootstrappers.mn blog, I look at methodologies for calculating the value of a company – beyond the fact that it’s worth what someone would pay for it…
https://www.bootstrappers.mn/post/methodologies-to-calculate-the-value-of-a-company