Business Questions

Ebonie Harrington

 BUSI 530: LUO

 Dr. A. Fapetu

 Discussion Board 2

Discuss the factors that lead to a valuation of a company is worth compared to that of the financial statements, and how company executives create the most value for all stakeholders.

Business valuation estimates the economic value of an owner's interest in a business. It is used to determine the price financial market participants consider appropriate to sell a business. It not only includes the price of the business but also any other elements that might alter that price: litigation, taxation, etc. Financial statements are analyzed to determine business valuation by conducting "common size analysis, ratio analysis, trend analysis and industry comparative analysis." Comparisons are typically done to other similar-type companies as well to determine value. A company's cash flow history is also evaluated when determining value.

How does scripture tie into perceived valuation of a company and stock price?

The following are scriptural references that show outlined business ethics. Each serves to present the case of fair business dealings. The question asks about "perceived valuation" and "stock price," and the simple answer is that everything needs to be ethically sound. This is difficult to do since we are speaking about "value" in subjective terms. I hope the following texts will help make your case. Please get in touch if you are confused or do not see the connections.

One must not defraud or cheat people in business (Lev. 19:13, 25:14); mislead a man even verbally (Lev. 25:17); or vex the stranger and do him injury in trade (Ex. 22:20)

Leviticus 19:11 - Ye shall not steal, neither deal falsely, neither lie one to another.

Proverbs 11:1 - A false balance [is] abomination to the LORD: but a just weight [is] his delight.

Leviticus 19:13 - Thou shalt not defraud thy neighbor, neither rob [him]: the wages of him that is hired shall not...