Which Methods Are Most Commonly Used for Company Valuation in India?
Understanding the worth of a company is like getting the pulse of a business. It’s essential for mergers, acquisitions, fundraising, or even strategic planning. But how do professionals figure out the value of a company? Let’s dive into the most common methods used for company valuation India and see how they help businesses make informed decisions. 1. Discounted Cash Flow (DCF) Analysis When it comes to valuation, DCF is often the golden standard. This method looks at the future cash flows a company is expected to generate and then discounts them back to their present value. Sounds fancy, doesn’t it? But the idea is simple: money today is worth more than the same amount in the future due to inflation and risks. Why It’s Popular : It focuses on the company’s earning potential, making it ideal for businesses with predictable cash flows. When It’s Used : Commonly applied in industries like technology, real estate, or manufacturing. 2. Market Valuation Method Ever wondered how much...