BUSINESS VALUATION AI
Valuation Methodologies
DCF, Comps, and Precedent Transactions
Master the three main approaches to business valuation: DCF, comparables, and precedent transactions.
"Valuation is not a science—it's a structured argument supported by evidence. Your job is to build the most defensible case."
Business valuation is both art and science. The three primary methodologies—discounted cash flow, comparable company analysis, and precedent transactions—each tell a different story about value.
DCF captures intrinsic value based on projected future cash flows. Comparables show what the market pays for similar businesses today. Precedent transactions reveal what buyers have actually paid in M&A deals.
No single method gives the "right" answer. The best valuations triangulate across methods, understand why they differ, and defend a reasonable range. In this topic, you'll master each methodology and learn to synthesize them into a defensible valuation.
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Related Topics
Multiple valuation methods triangulate to a defensible range
Assumptions drive more value than methodology choice
Comparability is judgment—no two companies are identical
Precedent transactions include control premiums that comps don't
The best valuation tells a coherent story across methods
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