Example of Asset Based Valuation
Extracted information from the books of Kent Limited.
|
Current liabilities
Bank overdraft
|
Sh.
300,000
50,000
350,000
|
Land
Stock in trade
|
Sh.
250,000
100,000
350,000
|
Stock has a realizable value of Sh.80, 000 and land Sh.300, 000. This company is supposed to be containing a share capital of ordinary shares20, 000.
Calculate the value of its shares.
i) Assets method
Assets = L and B 300,000
Stock 80,000
380,000
Liabilities [350,000]
30,000
Value of shares = 30,000/20,000
= Sh.1.50