When taken together they will give you a good idea of what your business is worth. Balance sheet estimate . This is the quickest and least accurate method. Adjusted balance sheet estimate . This is more realistic because it uses the same formula but makes adjustments of assets and liabilities based on their actual market value.
Inventory is often the largest single asset.
If you have inventory that cannot be sold or has decreased significantly in value, make a negative adjustment to this number. If you own a building, its market value may be significantly higher than book value, requiring a positive adjustment. If you have certain accounts receivable where collection is in doubt, adjust this value downward. Once adjustments are made, use the same formula as above. Excess earnings estimate .