Business valuation

Business valuation is the process of estimating what a company or business is worth. Common approaches include discounted cash flow analysis, multiples of earnings or revenue drawn from comparable companies and transactions, and asset-based methods. The result is usually a range rather than a single number, shaped by growth, risk, market conditions and deal context.

Prepared ahead of sales, acquisitions, equity raises and shareholder transactions.

A valuation is an evidence-based estimate, usually a range, derived from discounted cash flows, comparable multiples or asset values. Price is what negotiation produces, shaped by competitive tension, deal structure and timing. A well-supported valuation anchors the negotiation, but the market ultimately sets the price.

No single method is best: practitioners typically triangulate discounted cash flow analysis, multiples of earnings or revenue from comparable companies and transactions, and asset-based approaches. The right emphasis depends on the business — cash-generative companies suit DCF and earnings multiples, while asset-heavy businesses may lean on asset values.