What Drives Value for Manufacturing Companies?

Manufacturers are as varied as the products they make. They come in different sizes and specialties. So no universal formula applies when determining their value. Instead, a business valuator must fully understand the subject company’s operations to arrive at an accurate value conclusion. Here’s a closer look at seven factors that affect value in the manufacturing sector: 1. Financial performance. Regardless of the subject company’s industry, value is largely driven by financial health and stability. Income statements provide insights into historical revenue trends, profit margins and cost structures. Valuators also analyze balance sheets and cash flow statements. Key metrics that are considered include liquidity ratios, debt levels, and sources and uses of operating cash flows. A strong financial position may demonstrate that a company invests in growth...