SEBASTIAN LOZANO RAMIREZ
MARKET APPROACH METHOD
dEFINITION
The market approach is a valuation method used to derive the value of an asset or business. Under this method, the prices at which similar assets have recently sold are used as the basis for an asset valuation. The amounts of these recent sales are adjusted for any differences between the characteristics of the assets sold and the characteristics of the item being valued, with an emphasis on differences in quantity, quality, and size.
Processes related to the calculation of the value of technology using the selected method
Enterprise Multiple = EV / EBITDA
The mechanics of Market Approach involves finding a price multiple of the benchmark. For example: EV to EBITDA, price the book vlue, etc. Besides, the price multiple is then multiplied with relevant financial metric of the business being valued to arrive at a valuation estimated.
Where: EV = Enterprise Value EBITDA = Earnings before Interest, taxes, depretiation and amortization
How can companies create value from their innovation?
Business model innovation matters to managers because represents an often underutilized source of future value.Competitors might find it more difficult to imitate or replicate an entire novel activity system than a single novel product or process.
unad university - value and negotiation of technology
MARKET APPROACH METHOD
Juan Sebastian Lozano
Created on April 15, 2024
Sebastian Lozano
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Transcript
SEBASTIAN LOZANO RAMIREZ
MARKET APPROACH METHOD
dEFINITION
The market approach is a valuation method used to derive the value of an asset or business. Under this method, the prices at which similar assets have recently sold are used as the basis for an asset valuation. The amounts of these recent sales are adjusted for any differences between the characteristics of the assets sold and the characteristics of the item being valued, with an emphasis on differences in quantity, quality, and size.
Processes related to the calculation of the value of technology using the selected method
Enterprise Multiple = EV / EBITDA
The mechanics of Market Approach involves finding a price multiple of the benchmark. For example: EV to EBITDA, price the book vlue, etc. Besides, the price multiple is then multiplied with relevant financial metric of the business being valued to arrive at a valuation estimated.
Where: EV = Enterprise Value EBITDA = Earnings before Interest, taxes, depretiation and amortization
How can companies create value from their innovation?
Business model innovation matters to managers because represents an often underutilized source of future value.Competitors might find it more difficult to imitate or replicate an entire novel activity system than a single novel product or process.
unad university - value and negotiation of technology