Lions Financial

Determining the net worth of a company is one of the most important factors to take care of when selling or purchasing a company.

In this 5-part series, we have looked at Asset Valuation, Historical Earnings Valuation, Relative Valuation, and Discount Cash Flow Valuation.

The last evaluation method we will cover in this series is Discount Cash Flow Valuation.

When profits are not projected to remain stable for the foreseeable future, it is prudent to use the discount cash flow valuation method.

This takes your business’s future net cash flows and discounts them back to present-day values.

Using these figures, you can find the future net worth of the business, along with how much money your current/future assets will attain in the future.