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Business Valuation - Coggle Diagram
Business Valuation
Method
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Times Revenue Method
A stream of revenues generated over a certain period of time is applied to a multiplier which depends on the industry and economic environment
Earning Multiplier
Adjusts future profits against cash flow that could be invested at the current interest rate over the same period of time
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Liquidation Value
The net cash that a business will receive if its assets were liquidated and liabilities were paid off today
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Purpose
It can be used to determine the fair value of a business for a variety of reasons, including sale value, establishing partner ownership, taxation, divorce proceeding, sell all or a portion of its operations or looking to merge with or acquire another company
