Value this company

Charon · #1 03-21-2007, 06:57 AM

Suppose it is a poker related site, which makes it's money through affiliate programs. Earnings are about 45k/month. I would estimate that the total costs (sponsoring etc) are about 10k/month. So how much do you estimate this company to be worth? Would you need additional number to make a better estimate?

Please tell me how you arrived at your estimate, because I have no clue myself.

Thanks

Evan · #2 03-21-2007, 09:59 AM

Since it's a poker site I'd want to see data from each month for the last 12 months or so.

By the way, "earnings" refers to income after costs. It sounds like you mean revenue is 45k, not earnings.

Charon · #3 03-21-2007, 11:26 AM

Yes, you're right. Revenue is 45k/month.

Suppose it has been steady over the last twelve months. What would be your estimate?

What would be your estimate if you saw a decrease to say 20-30k revenue due to U.S. legislation?

What would be your estimate if you saw an increase over the last 3 months with 10k due to expanding European market?

I would be very interested to hear how you would value the different scenarios.

Thanks

Evan · #4 03-21-2007, 11:48 AM

[ QUOTE ]
Yes, you're right. Revenue is 45k/month.

Suppose it has been steady over the last twelve months. What would be your estimate?

What would be your estimate if you saw a decrease to say 20-30k revenue due to U.S. legislation?

What would be your estimate if you saw an increase over the last 3 months with 10k due to expanding European market?

I would be very interested to hear how you would value the different scenarios.

Thanks

[/ QUOTE ]
Well I guess my real question is what does the "per month" part of it means. Is 45k the revenue from last month? An average of some group of months? A projection of next month?

It's hard to tell you what the different scenarios would mean to me since I'm not really sure if we're on the same terms to start with.

Esection · #5 03-21-2007, 01:49 PM

what kind of required return are you looking for? over what kind of time period? (return is in percentage)

Evan · #6 03-21-2007, 01:55 PM

[ QUOTE ]
what kind of required return are you looking for? over what kind of time period? (return is in percentage)

[/ QUOTE ]
I think you need to reread your finance textbook.

Charon · #7 03-21-2007, 03:23 PM

Avg revenue of the last 12 months. It's also about the projected revenue for the coming months.

Suppose decline is after US legislation.

Suppose increase is last 3 months.

Does this make it more clear?

Thanks

MEbenhoe · #8 03-21-2007, 04:04 PM

Charon,

I think what Evan is looking for is month by month revenue.

Charon · #9 03-21-2007, 04:50 PM

I don't know the exact figures. I was more looking at a rough estimate. For instance, suppose monthly revenue doesn't fluctuate much. Is it possible to then give a rough estimate? I don't know if its possible; I was just wondering, and I'm a layman in this area.

AmadisSB · #10 03-21-2007, 04:59 PM

Hard to say, some people think of how long the venture will be profitable for, say for example, a rental house will range from 7-10 years of revenue as the selling price. So, say it makes 20k a year, it will sell for 140-200k.

But with a poker web site, it would be hard to say its life cycle with all the [censored] thats going down. Might be able to value it at 1-1.5 years. Without more information its really hard to make a good estimate.