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The mechanics of fiscal share valuation are sufficiently stable that the original guidelines in my article Cat sits on the mat are not in need of urgent revision.
However I have been asked several times whether they would be updated and this is now done.
Price earnings ratios (PERs) have undoubtedly softened since late 2005 but the downturn recorded by BDO’s private company price index i.e. a PER of 14.5 in quarter four 2005 against a PER of 9.0 in quarter one 2011 = 38% may be skewed by the 25% reduction from quarter four 2010’s PER of 12.0.
In compiling the trading company PERs there has been no analysis of market deals. As in 2005 they suggest what could prove acceptable to Shares and Assets Valuation.
They are industry neutral...
