Briefly Explain How the Formulas That Are Used for Valuing

question 57

Essay

Briefly explain how the formulas that are used for valuing common stocks can also be used to value businesses.

---

Definitions:

Financial Statements

Documents that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.

Translating

The process of converting financial statements from one currency into another currency to provide comparability.

Subsidiary

A company that is completely or partly owned and partly or entirely controlled by another company.

Property, Plant & Equipment

This refers to tangible assets that are expected to be used in the production of goods or services and are not intended for sale in the ordinary course of business.