This is a YouTube video titled "Company Valuation: How to Predict the Future?" containing a monologue or single-speaker discussion from February 23, 2025, analyzing business valuation methods, particularly focusing on profit multiples and the uncertainties involved in predicting company worth. The speaker reflects on valuation practices in the UK and expresses skepticism about some high valuations.
That. Yes, yes. Yeah, 1.66. So these valuations are fascinating. So usually what you do is you'll take the net profit, annual net profit of your business, then there'll be a multiple. So the multiple was usually decided on okay, how many years is your company likely to last? Which is in a way kind of like having a crystal ball because who actually knows? Is there a huge crash coming? Do people not going to want to buy umbrellas next year? I mean we don't know. So it' kind of everybody's best guess. So in the UK we'd probably be looking at maybe a three, four times multiple. So for a 1.66 million valuation, which is really high, I mean they'd have to be making about 400k a year profit right now. So are they doing this off projected profit? I mean, I don't know. To me that these valuations sometimes are just laughable.
