Business Appraisal Approaches

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Approaches to Business Valution

Within the three approaches to valuation there are methods for each one.

Asset and Cost Approach

A frequently used method under the asset approach is the

adjusted net asset method. When using the adjusted net asset

method in valuing a business, business ownership interest, or security,

the valuation analyst considers, when appropriate, the following

information related to the premise of value:


• Identification of the assets and liabilities


• Value of the assets and liabilities (individually or in the aggregate)


• Liquidation costs (if applicable)

More About the Asset Approach

Market-Based Approach

A general way of determining a value indication of a business, business ownership interest, security, or intangible asset by using one or more methods that compare the

subject to similar businesses, business ownership interests, securities, or intangible assets that have been sold.

More About Market-Based Approach

Income (Income-Based) Approach

A general way of determining a value indication of a business, business ownership interest, security, or intangible asset using one or more methods that convert anticipated economic benefits into a present single amount.

More About the Income-Based Approach

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