What are the Main Valuation Methods for Business Valuation?

When valuing a company on going concern basis, there are three main valuation methods used by industry practitioners in banking and finance and also valuation specialist: (1) discounted cash flow model, (2) comparable company analysis, and (3) asset-based method. These are the most common methods of valuation used in investment banking, equity research, private equity, corporate finance, mergers & acquisitions (M&A), leveraged buyouts (LBO) and financial reporting.

Although the general principles are similar, valuers apply the methods in connection with applicable accounting standards, valuation standards and the rules and guidelines of local regulators depending on actual situations.

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