What are the different types of valuation methods?

Different types of valuation methods are used to determine the worth or value of an asset, company, or investment. Some common valuation methods include the market approach, income approach, and asset-based approach. The market approach involves comparing the value of the asset to recently sold similar assets in the market. The income approach focuses on estimating the present value of future cash flows generated by the asset or company. The asset-based approach determines the value based on the net value of the company's assets after deducting liabilities. Other valuation methods include the cost approach, which assesses the cost to reproduce or replace an asset, and the relative valuation approach, which compares the value of the asset to similar assets in the industry based on ratios or multiples. Different valuation methods may be appropriate depending on the specific circumstances and purpose of the valuation.

This mind map was published on 8 September 2023 and has been viewed 129 times.