Valuation Calculators
The validation of startup and emerging companies is a very difficult
task since most of them have a negative cash flow in the early
stages, but have the potential for a significant financial return
later.
Nevertheless, investors are confronted frequently by startups
and ventures whose current value must be estimated in spite of
the fact that much of the reward lies in the future.
Following are three of the most commonly used methods for the
valuation of startup and emerging companies, including the Income
Approach, Market Approach and Asset Approach.
Income Approach is an estimation of future cash flow that could
be taken out without impairing future operations, such as Net Present
Value, Equity Cash Flow and Capital Cash Flow (Adjusted Cash Flow
being a variation of this method).
Market Approach is an estimation of the value of a going concern
business by comparing to similar firms whose stock is publicly
traded. In many cases, this approach is used as a secondary valuation
method to verify the estimates derived from the Income Approach.
Asset Approach is valuation based on the firm as a financial
option.
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Calculators
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