Business Valuation - Discounted Cash Flow
Business valuation is typically based on three major methods: the income approach,
the cost approach and the market (comparable sales) approach. Among the income approaches
is the discounted cash flow methodology calculating the net present value ('NPV')
of future cash flows for an enterprise. As an alternative to the more abbreviated
income capitalization approach, this methodology is more relevant where future operating
conditions and cash flows are variable or not projected to be materially consistent
with current performance levels.