by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Strategic Considerations in Valuation Back to: ECONOMICS, FINANCE, & ANALYTICS The First Chicago Method of Business Valuation The First Chicago Method is a hybrid approach that employs multiples to derive a terminal value and discounts future...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: First Chicago Method Back to: ECONOMICS, FINANCE, & ANALYTICS Venture Capital Method The venture capital method (VC Method), as the name implies, is most commonly used in the venture capital industry and for valuing startup ventures. As...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Venture Capital Method Back to: ECONOMICS, FINANCE, & ANALYTICS Angel Investor Methods Investors have developed multiple valuation strategies to account for the difficulty in assessing the value of early-stage, growth-based startups in the...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Angel Investor Methods Back to: ECONOMICS, FINANCE, & ANALYTICS Overview of Pre-Money and Post-Money Calculations The value of a business in a funding transaction begins with determining the pre-money and post money valuation. This valuation...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Pre and Post-Money Calculations Back to: ECONOMICS, FINANCE, & ANALYTICS Value of Dividends Method This method relies on the idea that a stock is only worth what it will provide to investors in future dividends. If a business does not...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Value of Dividends Method Back to: ECONOMICS, FINANCE, & ANALYTICS Economic Value Added (EVA) This methodology focuses on the return on investment expected from the company above the relative cost of capital. Take the amount of requested or...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Economic Value Added Method Back to: ECONOMICS, FINANCE, & ANALYTICS Excess Earnings Method Another earnings-based method is excess earnings. This method discounts company earnings based on two capitalization rates: a rate of return on...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Excess Earnings Method Back to: ECONOMICS, FINANCE, & ANALYTICS Discount Future Cash Flow Method The Discounted Cash Flow (DCF) method uses the projected future cash flows of the business after subtracting the operating expenses, taxes,...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Discount Future Cash Flows Back to: ECONOMICS, FINANCE, & ANALYTICS Build-Up Method of Valuation In the “buildup method” valuation begins with the risk-free rate. The individual valuing the firm then makes the subjective...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Build-Up Method Back to: ECONOMICS, FINANCE, & ANALYTICS Earnings Capitalization Model The earnings capitalization model values the company based upon the company earnings. To determine normalized earnings, you calculate a weighted average of...
