There are several forces that cause a company to have value. Some of these are:
The book value is generally the value of useable assets less, any liabilities. If a company that is making money but pays most of it out to it’s owners will accumulate very little book value. If a company however makes money and leaves some in the company after tax then it will build up retained earnings and this would put some definite value onto the company.
If a company has a strong history of revenue growth and has a reasonable expectation to continue this growth then this could reveal some future value to the company.
Future Cash Flow
Future cash flow is a sure way to build value in a company. There are complicated formulas which we use to evaluate a company based on reasonably expected future cash flow.
Companies that have innovative systems and procedures can be seen as having value due to this. Comprehensive procedure manuals are used to add value in a company.
Strong Management Team
A stable strong management team adds value to a company. There are some corporate acquisitions that occur just so the purchasing company can acquire the personnel
Positive Corporate Image
A strong positive corporate image will build value in the company. The image assists with the overall marketing strategy of the company.
Strategic Marketing Campaigns
To support the profitability and cash flow of the company a strong marketing strategy is essential.