27 Feb Business: The Theory of Value
Deal Capital relies primarily on the discounted cash flow to arrive at the value of a business. This method is generally recognized to be the most appropriate method for M &A purposes.
This method generally is best at capturing the full value potential of growth companies that have strong earnings in relation to equity. However, for some companies that have excessive assets, weak earnings in relation to assets, contract nature business, etc other valuation methods may provide more insight. In all cases other methods should also be considered to provide a sanity check to the discounted cash flow method.