Company valuations, and the four kinds of document they come from
Companies are the best-documented subject on this site, because unlike people they are required to file. But corporate figures are also the most systematically mislabelled: revenue is quoted as worth, an analyst’s multiple is quoted as a valuation, and a television investment ask is quoted as a price somebody paid. This section sorts them into four kinds and names the kind on every page.
Company pages on file
- adidas AG €23.7bn Group revenues for 2024, from the annual report
- Esports company valuations $231m The one esports purchase price a listed buyer disclosed
- McDonald’s $25.9bn Consolidated revenues for 2024, from the Form 10-K
- Pavlok $283,827 Publicly displayed total of the 2014 crowdfunding campaign
- Riot Games $231m What Tencent told shareholders it paid in 2011
- Shark Tank product companies $283,827 A platform-displayed crowdfunding total, the documented kind
- Sportswear group valuations €23.7bn adidas group revenues 2024, from the annual report
Each page states which of the four kinds of corporate document its figure comes from, because the difference between them is the difference between a fact and a rumour.
The four kinds, strongest first
A filing is lodged with a regulator under statute: audited, certified by officers, and consequential if wrong. A company announcement is published by the business itself: a completed acquisition, a funding round with terms stated. A platform total is displayed by a third party that processed the money, such as a crowdfunding page. An ask is a request for investment at a stated price, and it is not a valuation at all until somebody accepts it.
Ranking them this way is not pedantry. On the pages in this section, the single most repeated error is an ask arithmetically converted into a valuation and then cited for years afterwards as though a transaction had occurred.
| Document | What it establishes | Strength |
|---|---|---|
| Annual report or Form 10-K | Revenue, profit, assets and liabilities for a period | Filed and audited |
| Listed acquirer’s report | What was paid for a private company, and the stake acquired | Filed |
| Company announcement | That a transaction happened, on stated terms | Announced |
| Crowdfunding campaign page | What was pledged, and when | Third-party record of pledges |
| Investment ask on a broadcast | That a request was made at a stated price | Not a valuation |
| Analyst multiple | An opinion about price | Not a document about the company |
Why revenue is not worth
Revenue is what a company sold in a period. Market capitalisation is what the market will pay for its shares now. Net assets (assets minus liabilities) is the closest corporate equivalent of net worth, and it is almost never the figure quoted, because it is usually the smallest of the three.
All three are documented; only one of them answers the question a reader asking about "worth" is asking. Every page in this section states which number it is quoting and from which statement.
What a private company with no priced event is worth
Nothing that can be published. A valuation exists when somebody buys at a price and the price is recorded. Absent that, a private company has no valuation, not a confidential one, none at all: however successful it may be.
That is the cleanest statement of this site’s whole position, and companies are where it is easiest to demonstrate. Where earnings figures come from applies the same logic to people.
Questions readers send
Which corporate document is the strongest?
One filed with a regulator under statute: audited, certified by officers, and consequential if it is wrong. A company announcement is weaker, and an analyst’s multiple is not a document at all.
Is revenue the same as a company’s net worth?
No. Revenue is what the company sold in a period. The closest equivalent of net worth is net assets (assets minus liabilities) on the balance sheet, which is usually a much smaller figure.
Why is a Shark Tank valuation not a valuation?
Because an investment ask is a request. Dividing the amount asked by the equity offered produces an implied figure, but no transaction occurred at that price unless a deal closed.
How can a private company’s purchase price be documented?
When the buyer is a listed company. Its reporting obligations make the consideration public even though the seller published nothing.
The registers behind this page
- 01 Company filings and annual reports, Revenue, profit, assets, liabilities and disclosed transaction considerations Each company page names the report, the statement within it and the financial year