Valuation methods

Sman Business Value / Business Valuation / Valuation methods

“Predicting is difficult, especially when it concerns the future” is a phrase that should bring some relativism to the job of the valuator. After all, the value of an enterprise is enclosed in the future.

However, relativism is not concerned when it comes to applying the correct valuation method. A number of methods exist along which insight can be obtained in the economic value of an enterprise or block of shares. Those methods are not all evenly thorough, though, and can definitely not be applied in every situation. We therefore have summarised the methods applied most for you, including the advantages and disadvantages that come with them.