CA KESHAV GUPTA

Methods of
Valuation
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Discounted Cash Flow Analysis

Discounted cash flow (DCF) refers to a

valuation method that estimates the
value of an investment using its
expected future cash flows.
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Comparable Company Analysis

A comparable company analysis (CCA)

is a process used to evaluate the value
of a company using the metrics of
other businesses of similar size in the
same industry. It operates under the
assumption that similar companies
will have similar valuation multiples,
such as EV/EBITDA.
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Precedent Transaction Analysis

Precedent transaction analysis is a

method of company valuation where
past M&A transactions are used to
value a comparable business today.
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Market Capitalisation Approach

This method calculates a company's

value by multiplying its current share
price by the total number of
outstanding shares.
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Asset-Based Valuation

This method focuses on a company's

net asset value. It sums up the value of
all its assets (both tangible and
intangible) and subtracts liabilities.
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Earnings Multiples:

his approach uses metrics like Price-

to-Earnings (P/E) ratio, Price-to-Sales
(P/S) ratio, or Price-to-Book (P/B)
ratio to compare a company's
valuation to its earnings, revenue, or
book value
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