Putting a value on financial assets is relatively simple. There are some well-established methods and calculations you can perform, and you can usually get access to some pretty reasonable data to estimate some of the inputs and assumptions like forecast growth rates or expected profitability. There’s also a whole range of market benchmarks available like P/E ratios and other metrics for comparing asset values.
Of course, there’s an element of art to all this, and even the most precise calculations won’t help you make better investment decisions without a little wisdom and understanding of business.
But putting a value on some of the more important things in life is far more challenging. [Read more…]