Corporate Market Value
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Corporate Market Value
The value of corporations depends on their profit or loss. The more profitable they are, the higher their market value. Public corporations are traded on the stock exchange and share prices depend on supply and demand.
Private and state corporations values depend on a longer-term profit figures and not on a single month profit hikes. A sudden change in the profit (caused by sale of multiple month production in a single month, cannot cause corporate values to jump.
State and private corporations are sometimes in very bad conditions, suffer losses and have huge debts. Corporation market values can drop to a minimum value of -25 Billion.
Negative corporate values do not always imply that these corporations are close to bankruptcy. If a corporation is selling a product that is in short supply or the corporation is upgraded to a high level and has the capability to produce profits in the future, than it may make sense to support it with cash transfers and allow it to pay back its debt.
Bidding on such corporations becomes easier. The minimum bid amount is 1.0 million. Winning such bids and taking over such corporations does bring the risk of financial liabilities for the new owner. If a corporation you own is bankrupt, your country or enterprise (the owner of the corporation) will inherit the debts. If a corporation with 500 Billions in debt bankrupts, you inherit the obligation to pay the complete debt. Reducing corporate debts should be a priority.
Currently, corporations that are making losses, will bankrupt if the debt is > 200 Billions. Any corporation, including one that makes profits, will bankrupt if the debt is > 250 Billions. These maximum levels may be changed and warnings are given when even lower levels are reached.
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