General Valuation Methods and Approaches

Valuation methods are broadly categorized into three primary approaches:

1. Income Approach – Based on future cash flows or earnings.

Income Approach (Future Cash Flow-Based Valuation)

This approach estimates value based on the present value of expected future cash flows.

2. Market Approach – Based on comparable transactions or market multiples.

Market Approach (Comparable Transactions or Multiples-Based)

This approach determines value based on market data from comparable companies or transactions.

3. Cost Approach – Based on the replacement or reproduction cost of assets.

Cost Approach (Asset-Based Valuation)

This approach estimates value based on the cost required to replace or reproduce an asset.