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M&A Valuation Methods: Your Essential Guide with 7 Key Methods

Valutico

Market-based methods like Comparable Companies Analysis and Precedent Transactions Analysis offer relative measures of value based on market data. Income-based methods such as Discounted Cash Flow analysis focus on future cash flows to determine value. Simplicity: Relatively easy to understand and implement.

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Comparable Company Analysis – Pros and Cons

Valutico

Example: A private equity firm can use CCA to compare the valuation of a potential acquisition target to similar companies in the industry. Example: An investment banker can use CCA to determine a range of values for a company and then use DCF analysis to provide a more detailed valuation based on projected future cash flows.