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 [...]
After reading this article you will learn about the internal and external growth strategies adopted by a firm. Internal Growth Strategy: It is a form of growth strategy where firms grow from within. They use their own resources or acquire them from outside to increase their size, scale of operations, resources (financial and non-financial) and market penetration. Intensive Growth Strategy [...]
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 [...]