Which business valuation methods are omitted from ValuAdder and why?
ValuAdder does not use the following business valuation methods: • Asset accumulation • Capitalization of earnings • Cost to create Asset Accumulation method is perhaps the most recognized of the asset based valuation techniques. However, it requires substantial expertise in valuing the individual business assets and liabilities to arrive at an accurate business valuation. Business asset is viewed as valuable based on how well it puts money in your pocket. Hence, we believe that the asset, market and income-based business valuation methods used by ValuAdder best reflect the true value of the business, and how valuable the business assets are. The Capitalization of earnings method is very common in valuing small business and real estate investments. The business value is calculated by simply dividing the Business earnings by the so-called Capitalization rate. While the calculation is simple, the challenge of the method is in determining the earnings and capitalization rate to use. ValuA
