Valuation

Business Finance

Valuation is the estimated economic worth of an asset, company, or security. Methods: Income approach (DCF — discount future cash flows), Market approach (comparable transactions, public company multiples), Asset approach (sum of asset values). For private companies, valuations are typically based on revenue multiples (1-10× for SaaS), EBITDA multiples (3-15× for mature businesses), or revenue/EBITDA growth-adjusted ratios. Public market valuations are real-time (price × shares). Private valuations are negotiated and frozen until the next funding event. Valuation methodology should match the asset — DCF for stable cash flows, multiples for growth companies, asset-based for capital-intensive industries.