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 worth. 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. |
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