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A man is offering me 50% equtiy in his company for 200,000 dollars. What is the value of his company?

300,000 annual sales... 150,000 net income

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Kind of impossible to answer that with the info provided. Sounds in the ballpark though. The first thing that jumps out at me is that net income is 50% of sales??? Another big item would be how the present owner is compensated and what exactly does "net income" really mean in this instance. Is his income and any family members income deducted before or after the "net income" figure? You need at least a couple of years of profit and loss statements to even BEGIN to value the business.

Jul 19, 2011

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