How to obtain book value of a company
Please tell me how to obtain book value of a company where there are abundant reserves and surplus in a private limited company
Also how would finding book value be obtained for a holding company where there is a subsidiary company with accumulated losses
Asked 1 year ago in Audit from Kolkata, West Bengal
You have not specified the purpose for which Book value is required.
prima facie, the following are the methods :-
Method 1 - Straight forward method :-
NAV = A / B
Where A means
Share Capital + Reserves & surplus + Other share holders funds - Accumulated losses - Prel/deferred reveune expenses
B means = No of shares of the Company.
Method 2 :- Discounted future cash flows method
You need to arrive at the future cash flows for the company for the next X years and discount the same to current value by applying Discount factor and arriving at the value
Thanks & regards
Book value is required for transfer of shares of a private limited company ... that lease can you help in case of a holding companies any also .. company A holds 60 % of company B .. and company B has negative reserves and surplus as it has been in losses for last 8 years
Asked 1 year ago
Book value can be found out by
1) Assets less liabilities (Excluding capital balance and free reserve less ficticious assets )
2) Capital balance add free reserve less ficticious assets
If the compnay has negative EPS, then the shares can be transferred at face value.
Dear Vidya thanks for your reply ....I require Book value for transfer of shares of a private limited company ... please can you help in case of a holding company ... company A holds 60 % of company B .. and company B has negative reserves and surplus as it has been in losses for last 8 years
And please explain fictitious assets
Asked 1 year ago
Fictitious assets are those assets which are not going to render any benefit In future. For example debit balance of profit and loss A/C, preliminary expenses etc.
For book value of holding company do you have consolidated balance sheet?
In order to calculate Book Value we shall need to go through the Audited Balance Sheet of the Company.
There are many ways by which book value can be calculated. In essence book value is equity capital plus free reserves.
Please feel free to call/ revert in case of any doubts
Thanks and Regards
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