Problem
I need the methods of how to calculate the value of educational institutions. If I want to purchase a school or college, how to calculate its legitimate worth. Can you give me any excel sheet format or anything?
With warm Regards
Online Student
Solution
Dear student, method of calculation the value of acquisition of company will be same for the purchasing of school or college. Here, I am giving simple steps to calculate the value of any educational institute or school or college.
Ist Step
Take the balance sheet of educational Institute. By watching the balance sheet of educational institute, you can easily understand what are the main assets and liabilities of educational institute? You should also check, is it physical available in educational institute?
2nd Step
After this, you should Curious to know about what is market value of these assets and liabilities. Sometime, book value shows high value of assets but when we ask market value, it is often found half of its book value. You can meet local experts who deal in same business. They can tell you what is the market price of the assets of educational institute.
3rd Step
It is very necessary in furtherance that you should meet the owners of educational institute and personally check all the assets. If you don’t want to purchase some of assets, deny buying that particular asset.
4th Step
Calculate the value of educational institute with following simple formula
Market value of takeover assets =====XXXX
Less market value of takeover liabilities XXXX
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Purchase consideration ========== XXXX
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5th Step
After this, meet legal advisor or local advocate and create contract paper with his help and pay purchase consideration to owner of educational institute and sign the contract paper. This will be the legal document that you have legally purchased educational institute after paying agreed amount.
