Valuing a company based on Current State (CS) & Future State (FS)

When we are talking about investment in stock market. The major thing we have to know is about valuing a company on current state and future state.

(1) Current State: how is the current state of the company?

Looking at its Financial Statement for the past 5 years (at least): Profit & Loss, Operating profit, Gross & Net Profit margin, Balance Sheet, Account Payable & Account Receivables, Debts, Inventory, Cash & Equivalents, Cash Flow, Net Tangible Assets, etc. 

When all numbers are good then we have to look at its management team, majority shareholders, number of shares, Price Earning Ratio. 

The connection of management words from one financial report to the subsequent reports. 

So number is always the beginning of a business valuation of current state of a busines/company. Good number shown can ensure our purchase price is good enough to protect our capital when the business prospect does not run smoothly according to its vision.

(2) Future State: business vision & mission, business strategy & business objectives, management team and management way to keep its business strategy.

Will elaborate more .......