The 4 most common company valuation methods a sophisticated buyer will use

Have you been wondering about the value of your company? Have you been in discussions with a financier about selling (part of) your project? Here are the four most common methods a sophisticated buyer will use to valuate your company or project. To prepare yourself for your negotiations, choose the one that best suits your circumstances and run the numbers:

1. - Apply a comparable EBITDA multiple

2. - Calculate the net present value of your company/project’s cash flow stream

3. - Combination of EBITDA multiple and net present value

4. - Value creation marked by milestones

For more detailed information about these approaches, which one to choose and why, see pages 39-43 of The Decision-Maker’s Guide to Long-Term Financing – available here.