Small Business Management, 18e

Valuing the Business (Quantitative Factors)

• Asset-Based Valuation
• Estimates the value of the firm’s assets; does not reflect the value of the firm as a going concern.
• Market-Comparable Valuation
• Considers the sale price of comparable firms; difficulty is in finding comparable firms.
• Cash-Flow-based Valuation
• Compares the expected and required rates of return on the amount of capital to be invested in the business.

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