In theory the net assets of a company is it's value. If you are going to buy future profits need to be added in so this figure is multiplied by a multiple to get the rough selling price. It is in then bartered down from there once the due diligence has revealed any creative accounting.
If the net assets are negative the company is insolvent. Ie if all the people who are owed money ask for it tomorrow the company doesn't have the cash and assets to pay for it so will go bust.
For example.
Mr Wayne Rooney has 8 directorships, one of his companies is a film company. It's assets minus it's liabilities are £38million, in theory it's worth at least £38 million but if you bought it and carried it on then it could be worth £100million in 5 years, the seller would want more than £38million.
Very simplified commentary but you get the jist of it
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Topic: ***BREAKING NEWS*** Mongoose Cricket up for Sale (Read 42488 times)