2.01 Valuation methodologies and calculations
Some users are inclined to express wonder at the “magic” worked by CBVs in their calculations and methods. As all... View Article
Read ArticleCategories for 2. Common Methodologies in Valuators’ Reports
2.02 Valuation methodology – income methods
Given that the income generated by a business can be expressed in many ways and given that the value of... View Article
Read Article2.03 Valuation methodology – capitalized cashflow method
The main principle behind the capitalized cashflow method is that the annual free cashflows generated by the enterprise and available... View Article
Read Article2.04 Weighted average cost of capital (WACC)
The weighted average cost of capital (WACC) provides a capitalization rate used in the capitalized cashflows valuation method to calculate... View Article
Read Article2.06 Discounting cashflows
This introductory section is focussed on the theory underlying discounting cashflows. Discounted cashflow is based on the principle that the... View Article
Read Article2.07 Valuation methodology – discounted cashflow method
The main principle behind the discounted cashflow (“DCF”) method is that the future cashflows (both in and out) of the... View Article
Read Article2.08 Valuation methodology – market method
The principle behind the market method for business valuation is that actual transactions for comparable businesses provide a suitable guide... View Article
Read Article2.09 Use of market data in private company valuations
As discussed in the article on the market method, comparable market data is useful if it is relevant but will... View Article
Read Article2.10 Valuation methodology – adjusted net asset methods
Adjusted net asset valuation methods are used when there is no likelihood of finding any goodwill in the company. These... View Article
Read Article2.11 Reasonableness testing in valuation reports
A typical business valuation report prepared by a CBV will involve some assumptions and several areas where the CBV exercises... View Article
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