As an advisory firm, we use a variety of methods and techniques to conduct business valuations for our clients. Some of the most common methods include:
INCOME APPROACH
This method values a business based on its future economic benefits, such as earnings or cash flow. We use financial forecasting and discounted cash flow analysis to determine the present value of these future benefits.
MARKET APPROACH
This method compares the subject business to similar businesses that have been sold recently to determine its value. We use information from industry databases and other sources to find comparable transactions and make adjustments for any differences between the subject business and the comparables.
EBITDA APPROACH
This is a way of valuing a business by multiplying its EBITDA by a multiple, which is determined based on industry averages and the specific characteristics of the business.
ASSET APPROACH
This method values a business based on the market value of its assets, such as real estate, equipment, inventory and intellectual property. We conduct a detailed analysis of the company’s assets and liabilities to determine the net asset value of the business.
Our process for conducting a business valuation typically includes the following steps
