>>When I look at the firms accounts its tangible net worth is about £50m. The market capitalisation is nearer £600m.
>>I can't make it out - basically share buyers are willing to pay £600m for a company worth £50m. I guess its down to profits which are about 10% of turnover and the fact that medical shares are booming.
There are 3 standard methods of valuing companies. The market cap, the book value, and a profit forecast or multiple from which you can in effect calculate a NPV. The three can give very different answers. As a banker I'm sure you know this.
>>profits which are about 10% of turnover
One very crude rule of thumb is to value a business at 10 years profits. I guess that would work better for a fish and chip shop than say biotech or medical stuff, but what's the t/o of this business?
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Elizabeth Holmes 
Elizabeth Holmes 