3 Valuation Approaches
Income Approach, Asset Approach, Market Approach
Income Approach - analyses earnings, liabilities and profit margins in which the owner and investors
need to be able to determine if the business is viable to generate profits in future
production and good investment to take over and provide for the next level.
Asset Approach - analyses and determines on how much the fixed assets, cash less liabilities for a business
in a liquidation for cash purposes and getting the equipment of the business for what it's
Market Approach - The comparison on the subject business and closed transactions of other businesses that
sold in the market must be the same exact match to the earnings,profit and revenues
industry segment of the subject makes it possible to get an idea of how much a
business is worth. There is a database and several different websites to research and
source the values needed based on these factors.