business placed is always subject to YOUR assumptions Asset Based Approach This

Business placed is always subject to your assumptions

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business placed, is always subject to YOUR assumptions Asset-Based Approach This is a simple approach which places the value on the business on the basis of its Book Values of Net Assets (Total Asset – Total Liabilities) – USELESS APPROACH The Asset Based approach is widely used on the basis of replacement/realizable value of the assets and liabilities. The approach is subject to interpretation as to which assets and liabilities to include in measurement.
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Business Valuation – Asset Approach
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Business Valuation – Relative Approach Relative or Multiples Approach One of the widely used measures to come with the value of the business (or infact equity) Used highly in real estate. This approach uses a proxy (other asset) to look at in order to arrive at the value of your asset. This approach requires adjustment. (recall our real estate discussions)
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Business Valuation – Relative Approach Multiple = What are paying for the asset What are getting in return MV of Equity MV of Firm = MV Equity + MV Debt MV of Firm – Cash – Non - operating Asset Revenues Earnings Equity : Net Income / EPS Firm : EBIT Cash Flow Equity : Net Income + Dep.
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  • Fall '19
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