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How to Value an SME—An Introductory Guide

Valutico

Key methods include the Income Approach, which estimates future cash flows, the Market Approach, comparing with similar businesses, and the Asset Approach, valuing tangible and intangible assets. It needs to incorporate both the project risk and the opportunity cost, typically done using the CAPM method.

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How to value SMEs: A Simplified Roadmap

Valutico

Asset-based Approach : This method functions like an inventory check, summing up a company’s tangible and intangible assets and subtracting liabilities, resulting in the company’s net asset value. It needs to incorporate both the project risk and the opportunity cost, typically done using the CAPM method.