Many forensic accountants work on business valuation engagements. There are three basic approaches to valuing a business, the income approach, the cost approach, and the market approach. Please take a moment to discuss each of these methods of business valuation.© BrainMass Inc. brainmass.com June 4, 2020, 1:15 am ad1c9bdddf
The income approach of valuation puts a value on the business from the standpoint of an investor. This method primarily takes the assumption of, "how valuable will this business - this entity - be in the future?" As part of this method, income and profitability forecasts are carefully created by investors and other professionals, to assist in the value determination. The income approach is based on three ...
The solution discusses the three main ways to value a business, which include the income approach, the cost approach, and the market approach.