How to estimate the total worth of a company?
How to estimate the total worth of a company?
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borejwaz · External communityPost link
External question — Personal Finance Stack Exchange
Author: borejwaz
Original post: https://money.stackexchange.com/questions/126479
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
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As of 2020/6/10, if you look at the Microsoft stock (link below), you will see that the company has a
Mkt cap
of $1.49T. For some time now I had been under the impression that this figure indicated the total worth of the company.
https://www.google.com/search?q=msft+stock
For instance, if a publicly traded company has a
Mkt cap
of about $2M, I would have assumed that if somebody was in the process of acquiring the said company, that somebody would have to shell out a sum not much greater than $2M at the end of the deal.
A few days ago, I realized that my understanding could be flawed. For instance if a company is listed on multiple exchanges, then the
Mkt cap
would indicate the total worth on that exchange.
So what would be a good way to estimate the total worth of a company as the market currently sees it? Is there a metric in the quarterly/annual report that can be used? Please feel free to point out other mistaken assumptions that I may have laid out above.
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