Value and Price - Are They The Same

Sun, 10 August 2008 AEST

Ask An Expert

What's the difference between value and price? Surely, the value is what someone is willing to pay for the business! Or is it? And, does the difference justify the investment or matter?

I am often asked what's the difference between value and price? Surely, the value is what someone is willing to pay for the business! Or is it? And, does the difference justify the investment or matter?

While the pharmacy market is relatively efficient at setting realistic purchase prices for pharmacy, some areas of the market are poorly managed. In these areas, the market is not efficient. Clients are often confused when a valuation figure is far less than the asking price or price paid. As a result of favourable demand conditions, the current prevailing trend is that the seller's asking price often includes an 'acquisition premium.'

Is the premium worthwhile if valuations accurately assess the return on investment? It is best to firstly understand how a pharmacy is valued.

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