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Biotech / Medical : SANGUINE CORP. (SGNC) -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Forthright who wrote (2511)	7/4/1998 1:40:00 PM
From: dwlima	Read Replies (2) \| Respond to of 5402

I wrote that i have never seen a valuation that discounts future earnings. This is true, but misleading. I have seen many different ways (some complex and some simple) of valuing a company....after all any set of numbers can be discounted or multiplied by some factor(s)....what i have never seen is a valuation of future earnings used on a final report to a company. I have worked in 2 of the Big 6 accouting firms and I have never used this approach. Why? Because net income is easily manipulated by companies- especially small companies that do not use well-known accoutants. to say that valuing earnings is theoretically most correct is absolutely stupid in my humble opinion. i completely disagree with any author that would write that. i have not worked in the biotech sector- but i still find it hard to believe that discounting earnings is a more accurate way of valuing a company that discounting the only thing that matter- CASH. well, i am not a finanacial analyst- just a management consultant...and i spend my time implementing Activity-based costing systems, performance measurement systems, and providing economic-value added management tools. i have done a few corporate valuations and have seen others done....i have not seen a company rely principally on a DFE valuation....that is not to say it is not done or accepted in a given industry. BUT, i do not see any way in which this way can outperform a DCF valuation. i am open to proof....and the comments of an author does not do it for me.