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The Complete Business Valuation Formula Guide: 10 Essential Methods

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Market-Based Business Valuation Formula For a market-based calculation, use: CV = (EBITDA x 1.5) – (Current Liabilities x 0.5) Or V = (EBITDA * 1.3) / (Revenue – COGS) As an example, if a business's EBITDA is $300,000 and current liabilities are $50,000, the calculation would be: ($300,000 x 1.5) - ($50,000 x 0.5) = $425,000.

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Company Valuation Methods—Complete List and Guide

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The income approach estimates value based on future earnings, using techniques like the discounted cash flow analysis. The market approach compares the company to similar publicly traded businesses, or those recently sold or involved in some transaction.

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M&A Valuation Methods: Your Essential Guide with 7 Key Methods

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Market-based methods like Comparable Companies Analysis and Precedent Transactions Analysis offer relative measures of value based on market data. Income-based methods such as Discounted Cash Flow analysis focus on future cash flows to determine value.