Question
Rakesh Ltd. has a revenue of INR 10 lakhs. Its operating loss is INR 3 lakhs. EBITDA has been recorded at negative INR 2 lakhs.
Rakesh Ltd. has a revenue of INR 10 lakhs. Its operating loss is INR 3 lakhs. EBITDA has been recorded at negative INR 2 lakhs. Its Market Capitalization is INR 50 lakhs. No. of shares is 5 lakhs. The company has registered a Net Loss of INR 3 lakhs. The company does not have debt. Cash is Rs. 500,000. Future FCFF is negative INR 1 lakh for the next five years. The industry EV/EBITDA is 5x Price to Sales ratio is 2x and P/E ratio is 4x. WACC is 8%. Calculate the value of the company using a suitable method. Which method of valuation would suite the company?
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