1, improve asset value
If an enterprise goes bankrupt and goes into liquidation, liquidation value is roughly equivalent to the net current assets, that is, the value of current assets minus all liabilities, companies that often lose money, stocks with strong periodicity, small companies that are uncompetitive and financially unstable. For enterprises with steady growth, it should be a very good investment to buy such enterprises within the margin of safety.
2. Improve the value of going concern.
The income statement represents the profit of the enterprise, and the long-term sustained profit is the value of the continuous operation of the enterprise. Of course, this profit requirement is true, and companies are willing to share it with shareholders. The value of sustainable management is the focus of our investment now, but the problem is that many enterprises do not have the ability of sustainable management, or it is difficult for us to judge this ability.
3. Improve the value of cash flow
The market also gives high valuation to companies with abundant cash flow, but it seems that this has little to do with the ultimate interests of shareholders. If only cash flow is the god of wealth, and there is no profit, how to repay shareholders, the market's valuation of these companies is incomprehensible.
Extended data:
Indirect ways to increase the company's value
Indirect growth mainly includes three key factors: income, cost and expense.
Through the reasonable control of these three factors, we can improve the company's operating ability and indirectly improve the company's own value.
From the management point of view, paying attention to income, cost and expenses is to consider how to improve the management ability of the company.
Revenue-cost-expense = profit
Therefore, to improve management ability, a simple understanding is to increase income, reduce costs and reduce expenses, so that profits will naturally increase.