How do you determine a company's worth?

Intrinsic value, logically, is the present value of future cash flows; in practice, it is a value range driven by assumptions. What truly deserves cultivation is not the ability to calculate a precise number, but rather the judgment of "where the current price falls within this range." That is, calculate terminal values under three scenarios—pessimistic, base-case, and optimistic—based on growth rate and discount rate, and represent them visually along a number line. Then, using your target rate of return, compute a lower bound within this range: in principle, the company’s secondary-market trading price must fall below this lower bound (though “the lower, the better” is itself another issue) before you consider entering a position. However, the accuracy of this estimated range depends entirely on how thoroughly you understand the company’s industry growth rate and historical growth, as well as prevailing market discount rates. Only valuations grounded more closely in actual enterprise and industry realities yield finer-grained ranges—and thus more accurate price positioning. A company’s value comprises: ・Book value (accounting basis / lower-bound reference): Net assets per the balance sheet—used for solvency checks, not part of intrinsic value, and often inaccurate in practice (e.g., Wanda); ・Intrinsic value (economic basis / the object of estimation): Estimated present value of future cash flows (including brand premium); ・Market price (transaction basis / transaction reference): The agreed-upon price between buyers and sellers—used for relative positioning.

Two common methods for estimating a company’s market capitalization

1. Market Approach The market approach is a relative valuation method—that is, comparing the company against peers in the market to determine its relative position. P (Price) = Company’s total market capitalization E (Earnings) = Net profit B (Book value) = Net assets S (Sales) = Revenue G (Growth) = Growth rate EV (Enterprise Value) = Enterprise value ・P/E (Price-to-Earnings) method: Market cap = Net profit × Industry-average P/E ratio ・P/B (Price-to-Book) method: Market cap = Net assets × Industry-average P/B ratio ・P/S (Price-to-Sales) method: Market cap = Revenue × Industry-average P/S ratio—suitable for loss-making or high-growth companies ・PEG ratio: Adjusts P/E by incorporating growth—ideal for growth stocks. PEG = P/E ÷ Earnings growth rate (%). PEG 1 implies overvaluation. Example: A company’s financials are as follows: Assumed industry-average P/E = 40x; P/B = 5x; P/S = 8x ・Market cap: ¥50 billion ・Net profit: ¥1 billion ・Net assets: ¥12 billion ・Revenue: ¥7 billion ・Earnings growth rate: 25% P/E-based market cap estimate: ¥1 billion × 40 = ¥40 billion

Braskem S.A. Valuation Measures and Financial Statistics

Oct 19, 2026

This report outlines valuation measures and financial statistics for Braskem S.A., including market cap and profitability metrics, though most current data points remain unavailable.

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