The excel valuation here illustrates the basic steps to the calculation of value for a small and medium business, including:
– the calculation of the discount rate
– the Discounted Cash Flows
– the Market Approach
– The Valuation Summary
Depending on the circumstances and characteristics of the company and transaction, the Cost method can also be used, and different versions of the Income and Market Approach can apply.
Additionally, some transaction-specific features, such as the calculation of synergies, sometimes are added. A Valuation Engagement would also include more advanced methods to calculate the discount rate and the terminal value, among other features.
Prevalent valuation methods can be applied to startups as well, but with a variety of adjustments that are necessary to illustrate the different features.