Tag Archives | Firms

External Growth Strategy: Causes, Merits and Limitations

After reading this article you will learn about:- 1. Causes of External Growth Strategy 2. Merits of External Growth Strategy 3. Limitations. Causes of External Growth Strategy: 1. Economies of scale: Small firms have limited resources (financial and non-financial) and generally produce goods at high cost. They buy in small quantities and, therefore, pay high price for materials and other [...]

By |2016-08-09T07:56:15+05:30August 9, 2016|Growth Strategies|Comments Off on External Growth Strategy: Causes, Merits and Limitations

Diversification of Firms: Horizontal and Vertical

After reading this article you will learn about the horizontal and vertical diversification of firms. Horizontal Diversification of Firms: It means adding parallel products or services to the existing product/service line. The existing technical, marketing and financial expertise is applied to new products also. Horizontal diversification can take the following forms: 1. Concentric diversification: It is a form of horizontal [...]

By |2016-08-09T07:56:15+05:30August 9, 2016|Growth Strategies|Comments Off on Diversification of Firms: Horizontal and Vertical

Calculating the Valuation of a Firm (With Formula)

Some of the commonly used methods for calculating the valuation of a firm are as follows: 1. Capitalised Earnings 2. Assets Approach 3. Market Value Approach 4. Earnings per Share. Valuation of Firms: Method # 1. Capitalised Earnings: The capitalised earnings method is based on the philosophy that the price which a buyer would like to pay for the property [...]

By |2016-06-28T09:22:02+05:30June 28, 2016|Valuation of Firms|Comments Off on Calculating the Valuation of a Firm (With Formula)
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