We use up to 8 valuation methodologies across 3 different approaches to determine a Most Probable Selling Price for your business. 3 methods from the Income Approach, 3 methods from the Market Approach, and 2 methods from the Asset Approach. When it comes to valuing your life’s work, don’t accept any less.
The final value is determined with a weighted average of the values that derive from each of these methods. The reason we use a weighted average of different approaches instead of just using one or two is because some methods may be biased against companies with higher asset to income ratios, for example. By using more than one valuation methodology to derive the opinion of value, the figure would come closer to the most probable selling price.
The valuation methodologies in each approach are: