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The Role of Financial Projections in Business Valuation

Equilest

Assumptions and Forecasting Methodologies Financial projections are based on assumptions about various factors, such as pricing, market share, cost structure, and economic conditions. It is important to document and justify these assumptions clearly. The resulting net present value represents the estimated value of the business.

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M&A Terms Every Business Owner Should Know

Class VI Partner

Discount Rate Discount Rate refers to the rate at which a stream of future cash flows is discounted to determine Net Present Value. Multiple of Earnings Multiple of Earnings, similar to Multiple of EBITDA, refers to the multiple of a company’s earnings to establish the entity valuation of the company.