• BusinessValuation

Which Valuation Methods Suit my Business Better?

In this article, we will address which methods you can use that will suit your business better.

  • Market-Based Valuation: Calculates business’ value based on the recent purchases and sales of comparable businesses within the same industry.

  • Asset-Based Valuations: Calculates the net value of a business’ assets, both tangible and intangible, less the value of its liabilities.

  • Discounted Cash Flow: Shows the present value of a business’ future cash flow, discounted according to the risk involved in purchasing the business.

  • Capitalization of Earnings: Shows a business’ future profitability, accounting for cash flow, yearly return on investment, and expected value. This method extends calculations for a single period into the future.

These four business valuation methods (within three approaches) are the main ones that most SMEs should look at first when valuing a business.

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