Another question I present to all here, is what is the approximate value of PBLS. Is it based upon profit, cash flow, earnings, which earnings before or after taxes, with or without depreciation or depletion?
This is where many different opinions may come about. I for one know that when I analyse a transactio, you almost start at the pre-tax profit and add back in those expenses where are accounted for, solely to reduct tax liablity. This is mainly depreciation.
So I would ask all of you to look at PBLS true valuation numbers based upon the following:
More specifically, the value boils down to current and expected free cash flow -- earnings before interest, taxes, depreciation, and amortization, minus any capital spending necessary to bring the business up to par. Buyers take present cash flow and project out five years, then set a price on those earnings that guarantees a decent return. The price will vary according to the likelihood that earnings will grow, based on clues such as whether your revenue growth and margins have been consistent. Companies with clean balance sheets are less likely to take a haircut than cyclical, debt-ridden prospects. "It's an exercise in common sense," Walton says. "If you look at a business that has been growing at 10%, and you see projections that it will grow at 25%, that's pretty unrealistic."
While I have not applied the numbers to make the proper analysis, (I am too tired), I will try to do this at a later date, because we have something here.
Good night, something to ponder, REALITY
AI
