Valuation of share

See shivang the issue is very simple, you have to carefully observe the trend of profits on which the valuation assignment is based, of the profits show an increasing or decreasing trend, than this shows that profits have been moving in a particular direction and therefore weights are to be given for calculating the Profit which the business may be able to reap if carried on in future, however if these trends are not appearing in profits, than you have to calculate just Simple average of profits, and this thing largely depends on fact of the case. Pl clarify for further doubts

Hi nakul...thanx for replyig.  

 

Please read carefully my query,

I already know when to apply weighted avg n simple avg..this is not my question.  

Dear all Simply we can say that we have to find the Actual profit for the purpose of calculating FMP if any of adjustment is coming known after the completion of year and suceeding year then for calculating future maintainable profit first we have to make changes in the net profit of past year. and to arieve at the correct value of profit of last years.

it is not a prudent advise to calculate these elements before calculating (simple/weighted) average of profits, because we would not be having any base for future available profits, and future increased/decreased expenses/incomes.. Are there any such sum in any material of Institute or Practise manual, if yes pls let me knw...