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Business Valuation Methods

Valuing a business can be a complex discipline – as may be expected when huge sums are exchanged on stock markets every day on the basis of listed company valuations.

Likewise, numerous transactions are made – or, in the case of share schemes and tax planning, virtually made – each day relating to unquoted private companies.

When valuing an unlisted company or other small business as a going concern, there are a number of valuation methods used by industry practitioners. Below are four of the most common business valuation methods applied in determining the value of a company or business:

Here are four common business valuation methods that can assist you in determining the value of your business.

Maintainable Earnings Valuation

The historical – and expected maintainable future - profitability of a business is used to determine its current value. A maintainable earnings valuation is especially useful for business valuation when profits may be expected to remain stable. Maintainable earnings are typically calculated from the financial performance from the past three or four years.

Relative Valuation

The relative valuation method quantifies a value based on arm’s length open market transactions of a number of closely comparable businesses.

Asset Valuation

A company’s assets include tangible and intangible items. For certain industries and types of business, the book or market value of those assets can be used to determine the company’s worth. For trading ventures, the Net Asset Value may reflect the lowest value a company is likely to achieve.

Discount Cash Flow Valuation

The Discount Cash Flow (DCF) method can be appropriate if profits are not expected to remain stable in the future. The DCF method takes a business’ future net cash flows and discounts them to present day values.

R A Valuation Services specialises in providing sensibly and competitively priced formal company valuation and business valuation reports for all types and sizes of sole traders, partnerships, LLPs, private limited companies businesses and other organisations in the UK and Europe.

We are happy to explain the process and what you would need to provide, so why not phone the office on 01425 402 402.


Business Valuation Methods


An expert business valuation supported by a professionally prepared Valuation Report from an independent and authoritative source is an essential aid for:

  • Acquisition and divestment negotiations
  • Management buy-out and management buy-in
  • Business sale and business purchase
  • Director, shareholder, partner change
  • Restructuring
  • Matrimonial / divorce settlements
  • Dispute resolution
  • Litigation
  • Tax planning (e.g. EMI schemes), tax agreements and tax disputes
  • Incorporation
  • Borrowing and funding
  • Business development
  • Strategic planning
  • Performance benchmarking and indicators
Business Valuation Methods


Valuation Reports produced by R A Valuation Services Ltd are bespoke and geared to each client’s individual circumstances and requirements; they are definitive and realistic in the market place. As we are recognised as expert witnesses for supplying Valuation Reports to UK courts and HMRC queries/challenges, we are acknowledged to be the authoritative business valuer by:

  • HMRC including:
  • Shares and Assets Valuations (SAV)
  • Valuation Office Agency (VOA)
  • UK Courts
  • Banks
  • Other lenders and financial intermediaries
  • Tax specialists
  • Accountants

R A Valuation Services' Valuation Reports are tailor-made for their purposes, definitive and realistic in the market place. Indeed, such is their authority that an R A Valuation Services' Valuation Report is normally insisted upon in support of negotiations.