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Simply put, this approach lists a company’s total assets, deducts total liabilities, and determines overall value based on the difference between the two. Also referred to as BookValue . Capitalization Factor – This can be defined as a multiplier used for converting projected future earnings and revenue into present day value.
Some are inappropriate for young businesses or those engaged in certain enterprises, such as softwaredevelopment – where fixed assets are not usually important enough to use for purposes of valuation. 5 to 4 times gross revenues for similar businesses. Here they are, with short explanations of each: 1.
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