All businesses are worth their intrinsic value

As you say, plus the cash in its bank account.

For example, take two identical businesses. Two shops, exactly the same in every way as a business.

However, shop one has put the cash it’s generated in its bank account, and that’s now £1m, whereas the owner of shop 2 has taken the cash out as salary / dividend or whatever and doesn’t have any cash in the bank.

If someone is buying a business (including the business bank account), shop 1 is worth £1m more even though the businesses are identical.

Posted By: SimonOTBC, Jan 28, 09:58:09