Valuation methodology – The market approach proves informative, challenging

Description

Abstract: When helping to take a business to market (or helping someone buy a business), appraisers often employ the market approach. Unlike the other two primary valuation methods, the income and asset approaches, the market approach looks to similar businesses to estimate a company’s fair market value. This article reviews the market approach as well as two variations on it, the transaction method and the guideline public company method.