💡 Why is share price higher than book value?

When we do a company valuation, we usually discount future cashflows back to today’s value.

That’s why the price sometimes looks “high” — there’s a premium. The shareholders who sell get the cash today, without waiting 5 or 10 years for the value to accumulate.

So in most cases, if the company is doing fine, the share price ends up higher than its book value.

But at the end of the day, buyer and seller still need to agree on a number. The buyer takes on the risk, because projections are never guaranteed — unexpected events can always change the outcome.

Our job is simply to make it clear where that price comes from, and what the company is expected to deliver.

🔍 Thinking of buying or selling a business? We can help make the numbers clearer.

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