David M Daggett CPA

Executive Leadership

David M. Daggett CPA - The Various Approaches to Business Valuation

David M. Daggett has been involved in the sale or purchase of over 150 companies during his career as a Certified Public Accountant. Not only has he relied on the CPA knowledge to advise on such matters, he is also a qualified valuation analyst. In his own business endeavors, knowing how to accurately value a business has enabled him successfully sell a couple of businesses he helped establish.

If you want to sell your business, you need to know its value. Rather than crunch the numbers yourself, it’s always good to seek the services of a professional who will guide on how to come up with a fair value of the business. Various approaches are used in this regard, with some explained below.

The asset approach

This approach views the business as having assets and liabilities that are used to come up with the value of the business. The asset approach basically aims to address the question of how much it will cost to come up with a similar business that achieves the same economic benefits.

Figuring out the assets and liabilities of a business might seem a little straightforward, but the challenge lies in finding what to include, the standard of measure, and the actual determination of what each asset or liability costs.

The market approach

With this approach, the business is valued according to what the market has set as the standard for similar businesses. The approach relies on the assumption that no business exists in a vacuum, and that the market can set the “going rate” for the business.

David M. Daggett, CPA has worked as a valuation analyst since receiving the official qualification in 1991.


Go Back