INTELITÉGEN.
BUSINESS VALUATION | FINANCIAL MODELING | PITCH DESIGN
BUSINESS
VALUATION
Business valuation is the process of estimating the total economic value of a company.
Whether you are considering a sale, an acquisition, or attracting investors, a precise valuation provides the clarity needed for informed decision-making.
THE PROCESS
COMMON VALUATION APPROACHES
INCOME APPROACH
A cash flow-based valuation approach.
For example:
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Discounted Cash Flow (DCF) method: Projects future cash flows and discounts them to present value using a required rate of return.
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Capitalization of Earnings: Estimates value based on a single-period expected earnings figure and a capitalization rate.
ASSET-BASED APPROACH
A balance sheet-based valuation.
For example:
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Net Asset Value (NAV) or Book Value: Assesses the company’s assets minus liabilities at book value.
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Liquidation Value: Determines the net cash from selling all assets and settling all liabilities.
MARKET APPROACH
A comparative valuation approach.
For example:
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Public Company Comparables (Trading Multiples): Compares valuation multiples (e.g., EV/EBITDA, P/E) of similar publicly traded companies.
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Precedent Transactions (M&A Comparables): Looks at past sales of comparable companies to gauge valuation.
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